RHI Magnesita

EANS-Adhoc: RHI AG
RHI increases earnings again in the third quarter of 2012

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quarterly report

06.11.2012

Revenues of the RHI Group increased by 7.0% in the third quarter of 2012 in
comparison to the same quarter of 2011 and amounted to EUR 459.9 million. While
revenues in the Steel Division dropped by 3.7% in a market environment still
characterized by uncertainty, the Industrial Division recorded growth of 25.8%
as some major projects were delivered. The operating result of the third quarter
was up 28.3% on the comparable period of 2011 and amounted to EUR 50.3 million,
thus again exceeding the high level of the previous quarter. Positive
restructuring effects of EUR 6.3 million resulted from the sale of the plant in
South Africa. The Group's EBIT amounted to EUR 56.6 million in the third
quarter, exceeding the figure of the third quarter of 2011 by 44.4%. The EBIT
margin rose significantly from 9.1% to 12.3%.

Equity amounted to EUR 492.8 million at September 30, 2012, after EUR 471.1
million at June 30, 2012. Cash and cash equivalents rose from EUR 107.1 million
at the end of the second quarter of 2012 to EUR 234.2 million as a
"Schuldscheindarlehen" of EUR 130 million was issued. Net debt remained nearly
constant at EUR 424.4 million despite high investments in Norway and Turkey. The
gearing ratio improved from 90.2% in the second quarter of 2012 to 86.1%.

Net cash flow from operating activities amounted to EUR 43.0 million in the
third quarter despite an increase in working capital by EUR 10.2 million higher
due to reduced trade payables and added up to an accumulated EUR 91.4 million. 


                                   Q1 - Q3             
in EUR million                 2012     2011      Change
Revenues                    1,372.7    1,280.7      7.2%
EBITDA                        181.0      148.0     22.3%
EBITDA margin                  13.2%      11.6%     1.6pp
Operating result 1)           132.6      108.4     22.3%
Operating result margin         9.7%       8.5%     1.2pp
EBIT                          134.3      108.4     23.9%
EBIT margin                     9.8%       8.5%     1.3pp
Profit before income taxes    124.0       88.9     39.5%
Profit for the year            85.6       90.0     (4.9)%
Net cash flow from 
operating activities           91.4       74.9     22.0%
Investments in property, 

plant and equipment and 

intangible assets             106.3       32.2    230.1%
                         
Number of employees 
at end of quarter             8,097      8,001      1.2%
Average number of 
employees Q1-Q3               8,115      7,711      5.2%

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

Steel Division 
Due to weaker demand in Europe during the summer months, revenues in the Steel
Division, at EUR 272.1 million in the third quarter of 2012, fell significantly
short of revenues in the second quarter of 2012 at EUR 296.8 million and
revenues in the 2011 reference period at EUR 282.5 million. The operating result
dropped from EUR 21.6 million in the second quarter of 2012 to EUR 16.5 million
in the third quarter of 2012 and was also lower than in the prior-year period of
EUR 20.2 million. The operating result margin, at 6.1%, was below the 7.3% of
the previous quarter and also lower than in the prior-year reference period.

Industrial Division
Due to the very positive business development in the nonferrous metals business
unit, revenues in the Industrial Division, at EUR 174.8 million in the third
quarter of 2012, slightly exceeded the strong revenues of EUR 169.2 million in
the second quarter of 2012 and significantly exceeded the figure of the 2011
reference period of EUR 138.9 million. The operating EBIT improved from EUR 21.7
million in the second quarter of 2012 to EUR 29.1 million in the third quarter
of 2012 due to a shift in product mix, also exceeding the operating EBIT of EUR
14.4 million in the comparable quarter of 2011. The operating result margin, at
16.6%, exceeded that of the previous quarter at 12.8% as well as that of the
comparative period of 2011.

Raw Materials Division 
Revenues of the Raw Materials Division, at EUR 59.7 million in the third quarter
of 2012, were slightly below the figure of EUR 62.0 million in the second
quarter of 2012, but significantly exceeded revenues of the same period in 2011,
at EUR 48.0 million, due to the acquisition of Premier Periclase Ltd. (PPL) in
Ireland in September of the previous year. Operating EBIT decreased slightly
from EUR 5.4 million in the second quarter of 2012 to EUR 4.7 million in the
third quarter of 2012, slightly exceeding the value of EUR 4.6 million the
comparable period of 2011. The operating result margin amounted to 7.9%, falling
short of both the figure of 8.7% in the previous quarter and that of the 2011
reference period. 

Investments
The projects designed to increase backward integration of magnesia raw materials
to some 80% are largely going according to plan. The second rotary kiln in
Turkey, with an annual capacity of 70,000 tons of high-grade sinter magnesia,
was completed in the past quarter, and the gradual commissioning of the fusing
lines in Norway with an annual capacity of approximately 80,000 tons of
seawater-based fused magnesia was started; consequently, RHI will effectively be
self-sufficient outside China.
In Brazil, changed political framework conditions made it necessary to revise
RHI's plans for a production site in the federal state of Rio de Janeiro. At
present, the planned refractory product portfolio and the sourcing of local raw
material are evaluated.

Vision 2020
In the course of the strategy process and of revising the Vision, the RHI
Management Board defined financial targets which provide for revenues of EUR 3
billion and an EBIT margin of 12% or above. The revenue target is to be
accomplished through organic growth and acquisitions.

Outlook 
Although the economic environment is weakening, RHI expects a slightly higher
level of revenues and a higher EBIT margin in the year 2012 than in the previous
financial year. Despite indications that the economy is slowing down, RHI
expects revenues for the year 2013 to reach a similar level as in 2012. The EBIT
margin should continue to improve further due to a higher level of backwards
integration and consistent cost management.

The report on the third quarter of 2012 is available on RHI's 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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issuer:      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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