7th May 2025 11:48
(Alliance News) - RHI Magnesita NV on Wednesday said downside risks to its 2025 trading outlook have increased, due to a weak outlook for performance in the first half and rising global trade tensions.
The Vienna-headquartered manufacturer of refractory products for the processing of steel, glass and non-ferrous metals said conditions in the first quarter "became more challenging".
The firm said this reflected "lower sales volumes, a continued decline in project business in the glass and non-ferrous metals sectors worldwide and lower pricing for cement and steel markets in India and the Middle East".
It said earnings before interest, tax and amortisation margins in the three months to the end of March were lower, due to lower volumes in high-margin project business, weaker finished goods pricing and higher costs.
RHI Magnesita said it continues to operate its plants at a lower level of capacity compared to the final quarter of 2024.
The company said it is implementing a price increase programme to restore margins over the rest of the year, but it said increases will be more challenging in current market conditions.
It expects performance to improve in the second quarter, based on its order book and supported by cost saving initiatives.
It expects the first half to contribute between 35% and 40% of full-year adjusted Ebita, with the rest weighted to the second half.
"Whilst the current order book still could allow delivery of full year guidance for adjusted Ebita to be modestly ahead of 2024 including Resco, the group is mindful of the elevated risk posed by current macroeconomic volatility," RHI Magnesita said.
The company said if the current exchange rate is maintained for the rest of 2025 it will face a EUR15 million incremental headwind to adjusted Ebita.
Chief Executive Officer Stefan Borgas said: "RHI Magnesita continues to navigate difficult market conditions as end markets and customer production volumes remain subdued and as industrial projects are being postponed into the second half of the year. New uncertainties surrounding global trade and tariff arrangements are adding complexity to our planning processes and risk of further project postponements.
"Guidance for 2025 adjusted Ebita to be modestly ahead of 2024 is maintained, although downside risks have increased and a step up in profitability in the second half will be required to meet expectations."
Shares in RHI Magnesita were down 4.3% to 3,105.00 pence in London on Wednesday morning.
By Michael Hennessey, Alliance News reporter
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