12th Aug 2019 09:04
(Alliance News) - Refractory products firm RHI Magnesita NV on Monday reported strong interim revenue growth in spite of difficult market conditions, which are expected to continue into the second half of 2019.
For the six months to the end of June, pretax profit jumped 83% to EUR164.7 million from EUR89.9 million the year before.
Reported earnings before interest, taxes and amortisation climbed 4.1% to EUR227.9 million from EUR219 million, while on an adjusted basis, at constant currency, Ebita rose by 3% to EUR234.2 million from EUR227.7 million.
Revenue for the period, grew by 2.2% to EUR1.54 billion from EUR1.51 billion the prior year, due to a strong US dollar compared to the euro and Brazilian real, as well as a robust performance from RHI's Industrial division.
RHI's Industrial division reported revenue growth of 13% to EUR464 million, on high demands for refractories from the glass industry and the environmental sector, as well as in developing countries amid the search for a new method of storage and landfill.
The Steel division, however, was weaker, with revenue decreasing by 1.8% to EUR1.08 billion, mainly due to weaker customer demand in Europe.
Demand for steel in Europe was lower due to a weaker automotive sector, lower steel prices causing customers to cut production, as well as higher refractory stock levels and price competition.
Elsewhere, the US trade tariffs against China have served to increase pressure on the European steel market. However, revenue in other regions rose higher.
RHI Magnesita declared an interim dividend of 50 euro cents per share, having paid nothing for the year before.
Looking ahead, RHI Magnesita said it has seen volumes and visibility deteriorate in several of its markets in worsening trading conditions as a result of macroeconomic uncertainties.
Although it expects the uncertainty to continue in the second half of 2019, the group has left its expectations for the full year unchanged.
"I am pleased to announce a robust financial performance in the first half of 2019, which has seen a very strong performance from our Industrial division, offsetting a slightly softer performance from the Steel division in more challenging market conditions," said Chief Executive Stefan Borgas.
"In the second half of this year, we expect the current market uncertainty to continue, which with poor visibility, there is the possibility of reduced customer inventories. However, the self-help measures at our disposal, the initial benefits of the price rise programme announced in April and the momentum in our Industrial division underpin our confidence in further progress," Borgas added.
Shares in RHI Magnesita were down 2.0% at 4,078.00 pence on Monday in London.
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