RHI Magnesita

EANS-News: RHI AG
Global recession leads to a decline in revenues and earnings in the 1st quarter of 2009

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finances

Wien (euro adhoc) - The global recession had clearly negative effects on the business of RHI, the world market leader in refractories, in the first quarter of 2009. The dramatic decline in world steel output by 22.8% led to a sharp drop in demand in the Steel Division. In contrast, the Industrial Division, which benefited from a high order backlog in the first months of 2009, presented itself in a robust state. The low demand also had a negative impact on the Raw Materials/Production Division.

Revenues, at EUR 315.8 million, fell 19.4% short of the figure of the comparative period in 2008. The dramatic drop in demand in the Steel Division caused a lower coverage of fixed costs due to reduced capacity utilisation. Consequently, EBITDA fell by 54.6% to EUR 26.9 million over the comparative period despite lower energy, transportation and raw material costs and short-term countermeasures. EBIT deteriorated by 69.9% to EUR 14.1 million. The EBIT margin of 4.5% was below the prior-year figure of 12.0%. Profit was positive at EUR 4.7 million, compared with EUR 34.2 million in the same period of the previous year.

@@start.t2@@1st Quarter
in EUR million                                              2009      2008*)  Change
Revenues                                                      315.8    391.8      -19.4%
EBITDA                                                          26.9      59.2      -54.6%
EBITDA margin                                                8.5%    15.1%      -43.6%
EBIT                                                              14.1      46.9      -69.9%
EBIT margin                                                  4.5%    12.0%      -62.5%
Profit before income taxes                            5.4      39.0      -86.2%
Profit from continuing operations                 4.7      34.2      -86.3%
Loss from discontinued operations                 0.0      -0.4         n.a.
Profit                                                            4.7      33.8      -86.1%
Diluted earnings per share in EUR                0.10      0.85      -88.2%
*) adjusted

Steel Division Worldwide the steel output recorded a 22.8% decline in the reporting period compared to the previous year, with a particularly massive slump in Western Europe (-43.0%) and North America (-53.9%). RHI´s Steel Division was unable to defy this negative market environment and suffered a 28.9% decline in revenues to EUR 165.3 million. New products, contracts with new customers and stepped-up sales activities enabled RHI to gain market share in all important regions.

Industrial Division RHI´s Industrial Division recorded a substantially more stable development than the Steel Division in the first quarter of 2009. At EUR 145.9 million, revenues were largely retained at the level of the previous year (-2.5%). However, as customers were unable to finance their projects, an increasing number of projects was postponed or cancelled in the reporting period.

Raw Materials/Production Division The development of the Raw Materials/Production Divisions was characterised by low capacity utilisation and the resulting fixed cost deficit in the period under review. The availability of magnesitic raw materials was sufficient due to the economic environment, and the pricing development was largely stable.

Outlook The global recession will continue to deepen in the year 2009. Persisting weak export markets and low investments in RHI´s customer industries cause declines in sales volume, which are dramatic in some cases. This also has direct effects on the refractories industry. Due to the plummeting steel cycle a levelling out is the best case scenario for the Steel Division in the financial year 2009. In the Industrial Division, liquidity shortages on the customer side increasingly lead to postponements of investment projects and an unsatisfactory order situation.

As a result of the new profit centre organisation, RHI is able to respond to changes in demand and the market quickly and flexibly in this difficult market environment and to use sales opportunities even more efficiently. Sales activities, which have been stepped up since the beginning of the year, will enable RHI to gain further market share worldwide.

Due to the generally difficult economic climate and the development in the first quarter, RHI still expects a considerable decline in revenues and earnings in the financial year 2009 based on the current framework conditions. However, the decline in prices and volume is partially offset by lower raw material and energy costs. RHI immediately reacted to the deepening recession by worldwide capacity adjustments so that cost savings of EUR 80 million are to be expected through the implementation of structural optimisation measures. Approx. 50% of this amount is to become effective in the current financial year. In addition, a programme to reduce working capital has been initiated in order to further strengthen liquidity.

Details on the quarterly report as well as the online version of the quarterly financial report 1/2009 are available at RHI´s website www.rhi-ag.com .@@end@@

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ots Originaltext: RHI AG
Im Internet recherchierbar: http://www.presseportal.ch

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:  Wiener Börse AG / official dealing



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