16th Aug 2018 09:42
LONDON (Alliance News) - Refractory products company RHI Magnesita NV posted strong interim revenue growth on Thursday, while earnings multiplied year-on-year.
The company was formed in 2017 from the merger of RHI AG and Magnesita Refratarios AG, and listed in London in October that year. It has presented both reported and adjusted pro forma results, the latter being as if the company had existed in its current state since the start of 2016.
RHI Magnesita's reported revenue for the six months to June has more than doubled to EUR1.51 billion from EUR855.9 million, with organic growth 25%, driven by price increases as well as higher volumes.
Reported earnings before interest, tax, and amortisation has almost quadrupled to EUR229 million from EUR64 million, while on an adjusted pro forma basis at constant currency it climbed 88% to EUR218 million.
Pretax profit was EUR97.1 million compared to EUR45.9 million a year prior.
RHI Magnesita said integration since the merger has gone well, beating expectations, and it has increased its synergy guidance.
It now expects EUR60 million of cost savings in 2018 from EUR40 million before and EUR110 million by the end of 2020 from EUR70 million before.
Within its Steel division, adjusted pro forma revenue at constant currency rose 29% to EUR1.09 billion, with steel production growth "robust" at 4.6%, with the company outperforming the market.
Gross profit for the division was EUR283 million, 47% higher year-on-year, with the gross margin rising to 26% from 23%.
Within RHI Magnesita Industrial, revenue rose 14% on an adjusted pro forma constant currency basis to EUR413 million, with gross profit up 21% to EUR98 million.
RHI Magnesita made progress on improving the division's margin, but said it was held back by lower sales of higher margin products.
The company is not paying an interim dividend, but later in the year it said it will be announcing a policy "consistent with its status as a UK premium-listed, industrial company".
RHI Magnesita said overall, expectations for 2018 remain unchanged and it believes raw material prices will remain high for the rest of the year.
Shares were 6.9% lower on Thursday at a price of 4,614.00 pence each.
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