© Reuters. FILE PHOTO: General view of the ThyssenKrupp Steel Europe plant in Duisburg, Germany, January 7, 2020. REUTERS/Leon Kuegeler/File Photo

FRANKFURT (Reuters) – Thyssenkrupp (DE:TKAG) on Wednesday swung to an operating profit in the third-quarter on the back of high materials prices and demand from the car sector, but cautioned the positive impact on its steel division, Europe’s second-largest, would be delayed.

In the April-June period, adjusted earnings before interest and tax (EBIT) came in at 266 million euros ($312 million), from a year-earlier loss of 693 million when the corona pandemic took a toll on the German conglomerate.

At the group’s steel division, which could be spun off next year, adjusted EBIT reached 19 million euros in the third-quarter, compared with a 309 million loss in the same period last year.

“This is a good thing, but our long-term contract structures mean there is a delay in increased raw material and steel prices feeding through to our revenues and earnings,” Chief Financial Officer Klaus Keysberg said.

“The positive effect on earnings will come. We’ll just see it later than our competitors.”

The German submarines-to-car parts group is currently trying to simplify its structure after years of underperformance and recently agreed to sell two units in a bid to rid itself of businesses it no longer wants to own.

($1 = 0.8532 euros)