5th May 2020 09:57
(Alliance News) - Refractory products firm RHI Magnesita NV on Tuesday said tough first-quarter trading conditions were not too dissimilar to what it saw in the second half of last year.
More recently, RHI warned its second quarter has been dented by the Covid-19 pandemic, though its industrial arm has fared better than its steel division.
In the three months to March 31, RHI said the Covid-19 pandemic had a limited impact on its trading, but the "difficult market environment" of the latter part of last year persisted early in 2020.
Its steel division "remained weak" in Europe and South America, but was stronger in North America.
"The Industrial Division continued to perform well, particularly in Cement. Overall, demand levels were similar to the final quarter of 2019," RHI added.
Earnings before interest, tax and amortisation were slightly higher year-on-year, in line with internal expectations.
RHI added: "Raw material prices have fallen further in 2020, given the reduction in overall demand and uninterrupted supply from China, which has had a consequential impact on the pricing of some of the group's products."
The company warned of an "increasingly challenging environment" in the second quarter of 2020, with order book levels dropping and production falling in the steel division due to the health crisis.
"To date, the industrial division has remained more resilient, particularly in areas where maintenance work has been accelerated during shutdowns, although there have been some project postponements," RHI added.
RHI said it has deferred EUR45 million in capital expenditure planned for 2020 and in April it pulled its final payout.
It added on Tuesday that its board and executive team have taken a salary and fee reduction.
Shares in the company were trading 2.9% higher at 2,412.00 pence each in London on Tuesday morning.
By Eric Cunha; [email protected]
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