(Bloomberg) -- Thyssenkrupp AG beat second-quarter earnings expectations and raised its guidance, citing higher revenue and improved margins in material services and steel operations.

The company on Tuesday projected full-year earnings of 2.0 billion euros ($2.10 billion) before interest and taxes, above the previous high-end projection of 1.8 billion euros. Thyssenkrupp’s quarterly earnings rose to 802 million euros in the three months ended March 31, beating analysts’ forecasts for 576 million euros.

Thyssenkrupp cautioned that the improved guidance reflects expectations for stable pricing and unrestricted access to natural gas and other raw materials. Even so, the German company said it would continue to burn through cash this year, reinstating guidance suspended in the wake of Russia’s invasion of Ukraine.

The company now expects negative cash flow on the order of a mid-three-digit-million euros range, below the breakeven level anticipated before guidance was withdrawn in March.

“Despite more difficult conditions in our automotive and components-related businesses, we had a good second quarter,” Chief Executive Officer Martina Merz said in a statement, referring to supply chain problems such as a global semiconductor shortage and disruptions to parts delivery.

Merz’s management team has turned the company’s free cash flow guidance into a yardstick to measure its turnaround progress. Once synonymous with German industrial prowess, Thyssenkrupp is fighting for survival. The Covid-19 pandemic intensified deep-seated structural issues at the company, which still employs more than 100,000 people. 

Boom times for the steel industry are helping steady Thyssenkrupp’s long-shaky finances, with its material-services division, which trades and supplies metals to industrial firms, and its steel unit leading the group’s earnings improvement. 

“We expect that there will be sequential improvements for us in the subsequent quarters,” Chief Financial Officer Klaus Keysberg said of the new guidance. “A return to positive free cash flow before M&A remains our priority goal.”

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