RHI Magnesita Announces Combined Results for 2017 Nine Months

2017-11-17

Nov. 16, 2017 - RHI Magnesita’s year-to-date combined trading performance has reportedly improved since the second quarter of 2017, as underlying market conditions reflect a recovery of the activity levels seen in the first half. Revenue of the combined group for the nine months to September 2017 was €2.1 billion (approximately $2.5 billion), 9.3% higher than the comparative period in 2016. Operating EBITA was €224.6 million (~ $264.4 million), an increase of 23.7% over the first nine months of 2016.

According to RHI Magnesita, while global industrial production has been stable for many years, 2017 has been a year of synchronized growth in basic industries across the globe. Steel production is growing simultaneously in all regions where the company has a relevant market position. In this context, RHI Magnesita expects its revenue for 2017 to grow at high single digits, above the volume growth seen in its customers’ industries.

Regional steel production trends continue to be strong, as reported by the World Steel Association, with global volumes 5.2% higher than last year’s comparative period. Steel production in Brazil is up 9%, China and India are up 5% and 6%, respectively, with a 4% growth in North America and the European Union. RHI Magnesita’s Steel division’s performance reflects these trends, with trading activity above last year’s comparative period.

The Industrial division is reportedly performing in line with management expectations. On a business unit level, the Cement/Lime segment has been strong, especially in Brazil and Asia-Pacific, while the Environment, Energy & Chemicals segment is below expectations, mainly due to lower construction business in North America. The company expects revenue for the Industrial division to improve in the fourth quarter and to be in line with management expectations for the full year.

In addition to the strong cash flows from the underlying business, the company expects €40 million (~ $47.1 million) of proceeds from the divestments of Magnesita’s EU Mag-Carbon and RHI’s EU Dolomite businesses by the end of the year, as well as an additional €15 million (~ $17.7 million) in working capital monetization.