FRANKFURT Thyssenkrupp on Thursday raised the outlook for its closely watched free cash flow before mergers and acquisitions, expecting it to turn positive for the first time in seven years.

The German conglomerate still posted a second-quarter net loss of 223 million euros ($245 million), after a rise in interest rates and cost of capital led to impairment losses at its Steel Europe division, which is up for sale.

Second-quarter adjusted operating profit (EBIT) declined 74% to 205 million euros, mainly due to higher raw material costs and lower selling prices at Steel Europe. Impairment losses at the division came in at 350 million euros.

Steel Europe, for which Thyssenkrupp is targeting a standalone future, made an adjusted operating loss of 14 million euros in the second quarter, down from a 479 million profit in the same period last year.

($1 = 0.9084 euros)

(Reporting by Christoph Steitz; Editing by Alexander Smith and Miranda Murray)