RHI Magnesita

EANS-News: RHI AG
RHI with record-level operating result in the second quarter of 2012

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quarterly report/Half-year financial report 2012


Wien (euro adhoc) - Despite an environment strongly characterized by
uncertainty, RHI realized the second highest quarterly revenues in the group's
history, which were only EUR 2.0 million below the record level of the fourth
quarter of 2011. Both divisions recorded substantial growth in revenues:
revenues of the Steel Division exceeded the previous record of the third quarter
of 2011 by 5.1% and is primarily attributable to the good performance in Europe
and North America. Revenues in the Industrial Division reached the second
highest level ever recorded in this division, despite the seasonality of the
cement business, and is based on good business developments in the nonferrous
metals and environment, energy, chemicals segments. Moreover, RHI also reached a
new record level in the operating result since the crisis in 2009. 

In detail:
In the second quarter of 2012, revenues of the RHI Group increased by 8.9% in
comparison with the same quarter of 2011 and amounted to EUR 475.9 million. The
Steel Division increased its revenues by 6.0% and the Industrial Division
recorded growth of 13.3%. The operating result of the second quarter exceeded
the comparative period of 2011 by 21.8% and, at EUR 48.7 million, reached a new
record level since the recession in the year 2009. Restructuring expenses of EUR
4.6 million resulted from the partial closure of a production line at the
Bonnybridge plant in Great Britain. The group's EBIT amounted to EUR 44.1
million in the past quarter and is 10.3% higher than in the second quarter of
2011 despite the restructuring expenses incurred. The EBIT margin improved
slightly from 9.2% to 9.3%.

Although a dividend of EUR 29.9 million (EUR 0.75 per share) was paid out, the
equity ratio as of June 30, 2012 increased to 26.9%, after 26.7% at March 31,
2012. Cash and cash equivalents fell from EUR 154.1 million to EUR 107.1 million
in 2012 due the raw material projects in Norway and Turkey and investments in a
fourth tunnel kiln in China, the dividend payment and an increase in working
capital compared with the end of the first quarter. Net debt rose from EUR 363.1
million to EUR 424.7 million.


Net cash flow from operating activities rose only marginally in the second
quarter of 2012 to an accumulated EUR 48.4 million (Q1/2012: EUR 45.0 million).
This is primarily attributable to an increase in receivables related to
revenues.
                                        2nd Quarter        1st Half-year
in EUR million                          2012    2011       2012    2011
Revenues                                475.9   437.1      912.8   850.9
EBITDA                                   60.6    53.0      108.2    95.4
EBITDA margin                            12.7%   12.1%      11.9%   11.2%
Operating result1)                       48.7    40.0       82.3    69.2
Operating result margin                  10.2%    9.2%       9.0%    8.1%
EBIT                                     44.1    40.0       77.7    69.2
EBIT margin                               9.3%    9.2%       8.5%    8.1%
Profit before income tax                 38.1    34.9       73.5    58.6
Profit                                   30.3    30.7       62.3    49.0
Net cash flow from 
operating activities                      3.4     2.3       48.4    29.1
Investments in property, plant 
and equipment and intangible assets      33.7    10.2       64.2    15.1
Number of employees at end of half-year                  8,072   7,796


1) before reversal of impairment losses/impairment losses and restructuring
costs 

Steel Division
In the second quarter of 2012, revenues in the Steel Division reached a new
record level of EUR 296.8 million, thus significantly exceeding the figure of
EUR 279.1 million in the first quarter of 2012 and the revenues of EUR 280.1
million in the comparable period of 2011. The operating result improved
substantially from EUR 12.8 million in the first quarter of 2012 to EUR 21.9
million in the second quarter of 2012, also exceeding the result of EUR 20.6
million in the same period of 2011. The operating result margin, at 7.4%,
significantly exceeded that of the previous quarter at 4.6% and remained stable
in comparison with the same period of 2011. The restructuring expenses resulting
from the partial shutdown of a production line at the Scottish plant Bonnybridge
lowered the EBIT margin by 1.6 percentage points to 5.8%.

Industrial Division 
At EUR 169.2 million in the second quarter of 2012, revenues in the Industrial
Division clearly exceeded the revenues of the first quarter of 2012 of EUR 143.0
million and those of the 2011 reference period of EUR 149.3 million. EBIT
improved significantly from EUR 13.1 million in the first quarter of 2012 to EUR
21.1 million in the second quarter of 2012 and also exceeded the figure of EUR
18.2 million in the 2011 reference quarter. The EBIT margin, at 12.5%, was
significantly higher than in the previous quarter with 9.2% and slightly above
that of the prior-year period. 

Raw Materials Division
In the second quarter of 2012, revenues of the Raw Materials Division amounted
to EUR 62.0 million, slightly exceeding the figure of the first quarter of 2012
of EUR 60.2 million and significantly exceeding revenues of the 2011 reference
period, which had amounted to EUR 54.8 million. The decline in external revenues
compared with the previous quarter resulting from the expiry of delivery
obligations of the Irish company Premier Periclase Ltd. (PPL), which had been
acquired in 2011, was compensated by higher internal demand for raw materials as
externally purchased raw materials were replaced by own raw materials. EBIT
declined due to a lack of income from the sale of properties (previous quarter:
EUR 2.7 million) from EUR 7.7 million in the first quarter of 2012 to EUR 5.7
million in the second quarter of 2012, but significantly exceeded the figure of
EUR 1.2 million in the comparable quarter of 2011. At 9.2%, the EBIT margin was
lower than in the previous quarter, at 12.8%, and significantly exceeded that of
the prior-year reference period.

Investments
The second rotary kiln in Turkey will be commissioned in late August.
Consequently, RHI will have another 70,000 tons of high-grade sintered magnesia
at its disposal. The construction of the fusing plant in Norway is also
progressing. The step-by-step commissioning of the fusing lines in Porsgrunn,
Norway, is expected to start in September. Full-load operations, with an annual
production of roughly 80,000 tons of seawater-based fused magnesia, can be
expected for November; this will effectively make RHI self-sufficient in fused
magnesia outside of China. In late June, the fourth tunnel kiln at the RHI
Group's largest plant for fired bricks in China was commissioned. 

Outlook 
In a stable macroeconomic environment and with unchanged foreign currency
exchange rates, RHI expects a slightly lower level of revenues in the Steel
Division than in the first half of 2012 due to seasonal factors and
significantly higher revenues in the Industrial Division in the second half of
the year. Price increases in combination with a positive contribution to
earnings from the initiated backwards integration projects as well as a higher
share of industrial business should lead to a further increase in the EBIT
margin in the second half of the year, which leads us to expect a higher EBIT
margin in the entire year 2012 than in the previous financial year.

The half-year financial report 2012 is available on the RHI website
www.rhi-ag.com.


Further inquiry note:
RHI AG  
Investor Relations
Mag. Simon Kuchelbacher
Tel: +43-1-50213-6676
Email: simon.kuchelbacher@rhi-ag.com

end of announcement                               euro adhoc 
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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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