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EANS-Adhoc: Preliminary results of RHI AG: structural measures, cost management and strong fourth quarter enabled clearly positive result

  ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
  distribution. The issuer is solely responsible for the content of this
  announcement.
11.03.2010
•Restructuring programme shows clearly positive effects •Significant 
increase in operating margin to 9.9% in the fourth quarter •Revenues 
2009: EUR 1,236.9 million (-22.5%) •Operating result: EUR 79.0 
million (-52.5%) •EBIT: EUR 54.8 million, affected by restructuring 
measures and impairment losses of EUR 24.2 million •Increase in 
operating cash flow by roughly 64% to EUR 202.0 million •Significant 
improvement in balance sheet indicators •Reduction of net debt from 
EUR 375.0 million to EUR 233.2 million •Equity raised by 25% to EUR 
227.8 million •Positive demand continues in the first quarter of 2010
2009  2008 1)  2009   2008 1)
                                                  Q4      Q4
Sales volume (thousand tonnes)  1,436.2 1,952.6 426.0   390.0
in EUR million
Revenues                        1,236.9 1,596.7 336.7   375.8
Steel Division                    703.6   957.6 206.2   208.5
Industrial Division               513.6   605.6 125.9   158.8
Raw Materials Division
    External revenues              19.7    33.5   4.6     8.5
    Internal revenues             439.1   583.8 128.5   138.0
Pre restructuring EBIT 2)          79.0   166.2  33.5    18.2
Steel Division                     18.8    76.5  13.4     0.9
Industrial Division                75.5    79.3  22.0    21.9
Raw Materials Division             10.5    28.2   6.7    -2.0
Holding / other                    25.8    17.8   8.6    -2.6
EBIT                               54.8   148.4  22.0     0.4
Steel Division                     11.9    71.4  10.0     4.2
Industrial Division                67.0    75.5  19.2    18.1
Raw Materials Division              6.1    19.3   3.0    10.9
Holding / other                    30.2    17.8  10.2     2.6
1) adjusted
2) before impairment losses and restructuring expenses
Market environment The year 2009 was characterised by a massive slump
in steel output in Europe and North American in the first half and by
a recovery in the second half of the year. Over the entire year, 
steel production recorded a decline by 30% in the EU27 and by 34% in 
North America. In contrast, steel output in China rose by 13.5%. The 
cement market suffered a drop of up to 50% in countries including the
UK and Russia, while markets like China and the Near/Middle East 
remained unaffected by the crisis. The glass industry focused its 
investments only on repairs to extend useful life, and the low raw 
material prices triggered an investment stop in the nonferrous metals
industry.
Business development With revenues dropping by 22.5% to EUR 1,236.9 
million (after EUR 1,596.7 million), the operating result amounted to
EUR 79.0 million (after EUR 166.2 million). EBIT equalled EUR 54.8 
million (after restructuring measures and impairment losses totalling
EUR 24.2 million) versus EUR 148.4 million in the financial year 
2008. This value was achieved through capacity adjustments in all 
three divisions, an extensive cost-cutting programme and the 
resulting significantly improved cost structure. The operating margin
amounted to 6.4% in the whole year 2009, but significantly improved 
to 9.9 % in Q4, slightly below the margin of 10.4% in the year 2008.
The Steel Division defended its position as a full-range supplier 
with innovative solutions in the core markets in 2009 and expanded it
in important new markets such as Brazil. Revenues amounted to EUR 
703.6 million (after EUR 957.6 million) and, at EUR 206.2 million in 
the fourth quarter, exceeded the level of the third quarter of 2009 
by 15%.
The Industrial Division benefited from projects dating back to 2008 
in the first quarter of 2009 and was affected by a drop in demand 
from the second quarter 2009. With revenues of EUR 513.6 million 
(after EUR 605.6 million), the operating result of EUR 75.5 million 
was only slightly below the prior-year figure von EUR 79.3 million.
The operating result of the Raw Materials Division equalled EUR 10.5 
million (previous year EUR 28.2 million) and was above all 
attributable to the underutilisation of capacity in the first three 
quarters.
Measures The initiated cost-cutting programme resulted in savings of 
roughly EUR 53 million for 2009, which exceeded the target of EUR 40 
million. Through active cash flow management the cash flow from 
operating activities was increased by 64% to EUR 202.0 million. In 
addition, RHI introduced a new profit centre structure in 2009, which
gives the company an orientation closer to the market and the 
customer. A new plant concept allows flexible adjustment of 
capacities to the market conditions. The project "Simplification" 
will lead to simpler internal processes. Overall, the course for 
future growth was set through these measures.
Balance sheet Net debt as of 31.12.2009 was cut by 38% compared to 
the prior-year balance sheet date and amounted to EUR 233.2 million. 
The equity ratio amounted to 17.9% at 31.12.2009 (after 13.7%).
Outlook From the current perspective, RHI expects the positive trend 
to continue in the Steel Division in the first half of 2010. The 
level of revenues and earnings in the first quarter will be 
comparable to that of the fourth quarter of 2009. The development of 
the industrial business, which is to a great extent project-driven, 
will largely depend ton the expected infrastructure projects in 
Europe and North America, the development of raw material prices and 
the customers´ possibilities to finance projects. The Raw Materials 
Division expects largely full capacity utilisation at its western 
plants in 2010.
RHI expects further growth in the Steel Division for the whole year 
2010, while the Industrial Division will see a development similar to
the year 2009. Due to the market recovery, the expansion of the 
market position and an improved cost structure, RHI expects revenues 
and earnings to increase.
All of the above data for 2009 are preliminary. The final results and
the consolidated balance sheet 2009 will be published following the 
approval of the financial statements by the Supervisory Board on 26 
March.
end of announcement                               euro adhoc

Further inquiry note:

RHI AG
Investor Relations
Mag. Barbara Potisk-Eibensteiner
Tel: +43-1-50213-6123
Email: barbara.potisk@rhi-ag.com

Branche: Refractories
ISIN: AT0000676903
WKN: 874182
Index: ATX Prime, ATX
Börsen: Wien / official dealing

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