RHI Magnesita’s Trading Up-Date
RHI Magnesita’s 1st quarter trading performance continues to reflect the benefits of the high level of vertical integration. Price increases promoted strong development in revenues, more than offsetting higher raw material input costs. Revenue for the three months to March 2018, was EUR 745 million, 23 % higher than the comparative period on a constant currency basis (14 % higher on a reported basis). Operating EBITA increased by almost 70 % on a constant currency basis, to EUR 113 million, with a 15,2 % operating EBITA margin (when adjusted proforma numbers).
Steel production growth year-over-year was robust in South America, MEA and Asia Pacific and slightly positive in North America and Europe. RHI Magnesita’s Steel Division has outperformed these trends so far this year, with the exception of South America. It is too early to gauge the effects from the imposition of trade tariffs, yet the Group believes its diversified production base (in 16 countries across 4 continents), and client base (10 000 plants in more than 180 countries) will cushion any significant impact from these developments, as long as industrial output on a global basis is unaffected. In the Industrial Division, the non-ferrous metals segment performs stronger than last year with high margin order intakes so far. In EEC (Environment, Energy and Chemicals), the management sees increasing demand in China and CIS, with the installation business picking up. The cement/lime segment is flat, as result of still low capacity utilization in China and Brazil and some market share losses due to pricing. The minerals segment has benefitted from raw material price increases and supply shortage caused by the stricter environmental enforcement in China. The planned integration actions are continued. The group is confident in achieving the synergy target of yearly EUR 70 million by 2019 and EUR 40 million in 2018. RHI Magnesita’s dedicated integration team is working on several additional fronts which may lead to incremental savings and will be communicated when they reach an adequate maturity level. Approximately, EUR 10 million in synergies were already reflected in the 1st quarter results.