1st Apr 2020 08:19
(Alliance News) - Refractory products firm RHI Magnesita NV performed well in a tough market in 2019, it said Wednesday, but warned the future remains uncertain.
RHI's revenue in 2019 fell 6.5% to EUR2.92 billion, and pretax profit slipped 19% to EUR200 million.
Looking segmentally, Vienna-based RHI's revenue in the Steel division fell 10% due to weak end-markets and customer destocking, while in the Industrial unit, revenue rose 3.6% after a strong performance throughout the year.
Profitability was hurt by the lower revenue as well as a more than fivefold increase in restructuring and write-down expenses, including over EUR100 million related to the closure and downsizing of two plants in Europe.
Chief Executive Stefan Borgas said: "In 2019, RHI Magnesita has further demonstrated strong progress in executing our strategy, resolving previously identified operational issues and implementing the initiatives that will underpin our long-term growth.
"We have delivered a resilient financial performance in the year, despite difficult market conditions and lower raw material prices, particularly in our Steel Division in the second half."
RHI has decided against a final dividend "to preserve financial flexibility". It paid a EUR0.50 per share dividend for the first half of 2019.
"Despite the group's strong financial position, the uncertainty relating to Covid-19 means alongside the efficiency measures we are taking to preserve cash, the board has decided not to recommend the payment of a final dividend for 2019," said RHI.
"This decision will be reviewed later in the year once the outlook becomes clearer. The board believes this is an appropriate and prudent measure to take as it seeks to preserve RHI's strong liquidity, cash flow and financial position through these uncertain times."
Looking ahead, the firm said Covid-19 has not yet had a material impact on financial performance, but there has been a slowdown in customer activity particularly in the Steel division. Future demand is "very uncertain", RHI added.
Shares were 0.7% lower in early trade on Wednesday in London at a price of 2,036.00 pence each.
By George Collard; [email protected]
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