ThyssenKrupp's net profit for the fiscal year fell dour percent to 296 million euros ($312.2 million), compared with 309 million euros a year earlier.

Annual sales also dropped significantly, Germany's largest steelmaker reported Thursday, down by eight percent to 39.29 billion euros, while orders even slumped nine percent.

The company's annual earnings came in lower mainly because of overcapacity in the industry leading to price pressure on its steel operations and its materials services business, which sells products such as stainless steel and alloys.

Chief Executive Heinrich Hiesinger said that volatility in the materials markets meant the company needed to forge ahead with efforts to reshape its portfolio around its more consistently profitable capital goods businesses.

"We must continue with ThyssenKrupp's transformation," he said I the company's annual report.

The company's closely watched adjusted earnings before interest and taxes (EBIT) for the full year fell 12 percent to 1.5 billion euros, weighed down by lower profitability in its European steel, materials services and industrial solutions businesses.

Steelmakers in crisis

The announcement came amid ongoing consolidation in the European steel industry, which has had to cope with a protracted steel-capacity glut and a wave of inexpensive steel imports from countries such as China.

ThyssenKrupp in July confirmed that it was in talks with India's Tata Steel and other steel groups over a potential tie-up to face the crisis.

The company's steel operations in the Americas again posted a loss, despite an improved operational performance due to efficiency measures. There were media reports last month that ThyssenKrupp was in talks with Ternium to sell its steel plant in Brazil, the last asset of the company's unsuccessful venture in the Americas.

The industrial solutions unit, which builds a range of products from chemical plants to military submarines and ships, reported an adjusted EBIT loss of 16 percent, as a result of weaker markets for chemicals plants and mining equipment and a dearth of ship building contracts.

The company's capital goods businesses, including the high margin elevator division and a unit that produces high-tech components for the auto industry, were the only areas to post substantive earnings growth.

For fiscal year 2017, ThyssenKrupp said it expected adjusted earnings before interest and taxes to increase slightly to around 1.7 billion euros. The company also wants to achieve "a clear improvement" in net profit and a "slightly positive" free cash flow before mergers and acquisitions.

Management also said it would propose an unchanged dividend of 0.15 euros a share for fiscal 2016.

uhe/jd (Reuters, AFP, dpa)