© Reuters. The logo of German steelmaker ThyssenKrupp AG is seen at the gate to Haus Rheinberg, a villa used for seminars in the valley of the small stream Wisper that confluents with the Europe’s largest waterway Rhine near Lorch, Germany, September 15, 2019. REUTE

FRANKFURT (Reuters) – German conglomerate Thyssenkrupp (ETR:) on Wednesday raised its outlook for sales and operating profit for 2022 but cut its free cash flow forecast, reflecting a rise in both selling prices and commodity costs.

The submarines-to-car parts group expects its free cash flow before mergers and acquisitions to be in negative triple-digit million euros, compared with its previous forecast for a break-even.

“The dynamic movements in commodity and materials prices are weighing on our cash flow at present. However, we expect that there will be sequential improvements for us in the subsequent quarters,” Chief Financial Officer Klaus Keysberg said.

The group said it aims to return to paying dividends and generate positive cash flows, adding Russia’s invasion of Ukraine made “it more difficult to predict when precisely we will achieve these goals”.

The company, however, benefited from higher selling prices for steel and materials, it said, adding it now expected sales to rise in low double-digit percentage, compared with a mid single-digit percentage increase expected previously.

Shares in the company were indicated to open 7.3% higher in premarket trade.

Adjusted earnings before interest and tax (EBIT) are now forecast to grow to at least 2.0 billion euros ($2.1 billion), Thyssenkrupp said. It previously expected adjusted EBIT of 1.5 billion to 1.8 billion euros.

In the second quarter, adjusted EBIT nearly quadrupled to 802 million euros, while sales increased by nearly a quarter to 10.6 billion as order intake jumped 57%.

($1 = 0.9491 euros)

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