RHI Magnesita

Record revenues and improved profitability in second quarter 2011

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quarterly report

Wien (euro adhoc) - RHI recorded all time high quarterly revenues in the second
quarter of 2011, exceeding the record level of the second quarter of 2008 by
more than 5%, in spite of an environment strongly characterized by insecurity.
The Steel Division´s revenues were roughly 7% higher than the record figure of
the third quarter of 2008. With record revenues in the nonferrous metals and
environment, energy, chemicals segments, revenues of the Industrial Division
were only slightly below the peak value of the fourth quarter of 2008. 

In comparison with the reference quarter of 2010, the RHI Group´s revenues
increased by 9.7% to EUR 437.1 million in the second quarter of 2011. The Steel
Division recorded a 13.2% growth in revenues; in the Industrial Division growth
amounted to 3.1%. Second quarter 2011 sales volumes amounted to 503,194 metric
tons compared with 551,711 metric tons in the second quarter of 2008. The
significant revenue per metric ton increase is primarily attributable to the
increase in prices, which were necessary due to the rise in raw material costs
in 2010.  

The operating result of the second quarter, at EUR 40.0 million, remains at the
level of the comparable period of 2010 of EUR 40.8 million, with the second
quarter of 2010 containing a positive one-off effect of EUR 7.9 million. The
operating result margin, at 9.2%, thus still lagged behind that of the
comparable quarter of 2010 at 10.2%. In comparison with the first quarter of
2011, the RHI Group increased revenues by 5.6% and the operating result by
roughly 37% in the second quarter of 2011. The operating result margin of 7.1%
of the first quarter of 2011 was raised by 200 basis points. 

The tax rate in the second quarter amounted to 12.0% (Q1/2011: 22.8%); the cash
tax rate rose from 16.0% in the first quarter to 25.8% in the second quarter due
to advance tax payments for the year 2011 and tax payments for the year 2010.

At the balance sheet date on July 1, 2011 the equity ratio amounted to 22.5%,
remaining unchanged compared to the first quarter as dividend payment almost
completely offset the gain in retained earnings for the quarter. Cash and cash
equivalents were also nearly unchanged in comparison with the end of the first
quarter of 2011 and equaled EUR 86.6 million. Net debt rose from EUR 318.3
million to EUR 346.9 million, which was primarily attributable to the dividend
payment of roughly EUR 20 million in May. 

Net cash flow from operating activities increased only marginally in the second
quarter of 2011 to cumulated EUR 29.1 million (Q1/2011: EUR 26.8 million). This
is primarily attributable to an increase in receivables related to higher

                        2nd Quarter     1st Half-year
in EUR million         2011     2010    2011    2010
Revenues                437.1   398.5   850.9   740.7
EBITDA                   53.0    52.2    95.4    97.1
EBITDA margin            12.1%   13.1%   11.2%   13.1%
Operating results 1)     40.0    40.8    69.2    74.4
Operating results margin  9.2%   10.2%    8.1%   10.0%
EBIT                     40.0    38.6    69.2    70.3
EBIT margin               9.2%    9.7%    8.1%    9.5%
Profit before income 
taxes                    34.9    34.9     58.6   61.7
Profit for the year      30.7    27.6     49.0   49.1
Net cash flow from 
operating activities      2.3    (6.2)    29.1   16.2
Investments in property,
plant and equipment and 
intangible assets       (10.2)   (9.3)   (15.1) (14.5)
Number of employees 
at end of half-year                    7,796   7,258

1) EBIT before restructuring costs

Steel Division
In the second quarter of 2011, RHI´s Steel Division increased revenues by 6.6%
compared to the first quarter, thus clearly outperforming world steel production
with an increase of 2% in the reference period. The operating result improved
from EUR 6.1 million to EUR 20.6 million, with the result of the previous
quarter being strongly influenced by negative foreign currency effects. The
operating result margin amounted to 7.4%, significantly above the margins of the
previous quarters. 

Industrial Division
Although the winter repair business in the cement industry ran out in the second
quarter, the Industrial Division raised revenues to EUR 149.3 million, up 3.3%
on the first quarter of 2011. Compared to the second quarter of the previous
year, the increase was 3.1%. The operating result in the second quarter equaled
EUR 18.2 million; the operating result margin amounted to 12.2%, versus 10.9% in
the previous quarter.
On June 16, 2011 the acquisition of the Russian refractories manufacturer ZAO
Podolsk Refractories was finalized. Starting in 2012, the product quality on
site will be gradually improved as part of an investment and technology transfer

Raw Materials Division
The Raw Materials Division reported revenues of EUR 54.8 million in the second
quarter of 2011, versus EUR 40.6 million in the prior-year period. The operating
result amounted to EUR 1.2 million in the reporting period, which corresponds to
a margin of 2.2%.

In a stable macro-economic environment with unchanged foreign currency exchange
rates, RHI expects revenues comparable to the first half in the second half of
the year 2011. RHI assumes that in the third quarter the EBIT margin will be
comparable to the second quarter 2011. In the fourth quarter of 2011 the EBIT
margin for the RHI Group will rise to 9.5%. 

The half-year financial report 2011 and the online version are available on
RHI´s website

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

end of announcement                               euro adhoc 

company:     RHI AG
             Wienerbergstrasse 9
             A-1100 Wien
phone:       +43 (0)50213-6123
FAX:         +43 (0)50213-6130
mail:     rhi@rhi-ag.com
WWW:      http://www.rhi-ag.com
sector:      Refractories
ISIN:        AT0000676903
indexes:     ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English

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