RHI AG: Positive development in the first nine months of 2010 – growth in Brazil, Russia and China

RHI AG, the world market leader in refractory products, recorded a significant increase in revenues and earnings in the first three quarters of 2010 compared with the prior-year reference period, which was marked by the crisis.

Within the corporate strategy, steps were taken in the third quarter to strengthen RHI’s positioning in the emerging markets Brazil, Russia and China. At the same time, structural measures were taken through the decision to close down plants in Chile and Canada, which enable cost savings in the future.

Revenues of the RHI Group rose by 24.6% to € 1,122.0 million in the first nine months of the financial year 2010 in comparison with the reference period of 2009 (2009: € 900.2 million). The Group’s operating result was increased by 135.6% to € 107.2 million. (2009: € 45.5 million).

In a quarterly comparison 2009/2010, a 29.0% growth in revenues to € 381.3 million was realised. It was above all the Steel Division, where revenues were up 42.0% on the third quarter of 2009. Revenues of the Industrial Division rose by 7.1%. The Group’s operating result soared by 124.7% to € 32.8 million compared to the reference period of 2009. The operating result margin improved from 4.9% to 8.6%. Despite expenses for impairment losses and restructuring of € -6.4 million, which were largely attributable to plant closures in Chile and Canada, EBIT rose to € 26.4 million, versus € 11.4 million in the third quarter of 2009.

In comparison with the second quarter of 2010, the third quarter of 2010 showed a slightly weaker development in the Industrial Division as the framework conditions continued to be difficult. Revenues were 4.3% below the previous quarter. The increase in prices of important raw materials also had an adverse effect as price increases were only partially enforced in the reporting period.

As of 1 October 2010, RHI increased the equity ratio further to 23.2% (versus 22.3% as of 2 July 2010). Due to anticipated raw material purchases in China, investments and a cash payment in the squeeze-out proceedings of the German Didier Werke AG, net debt rose from € 234.4 million in the previous quarter to € 278.1 million.

Land purchased for future production site in Brazil

In late October, RHI purchased 980,000 square meters of land in the federal state of Rio de Janeiro, thus laying the foundation for the construction of a production site for refractory products. Depending on the final layout and the production range of the planned plant, the investment is expected to amount to a minimum of € 30 million. In the first phase, up to 100,000 tonnes of refractory bricks and mixes will be produced. Construction is scheduled to start in the first four months of 2011; the start of production is planned for late 2012.

In Russia, the share held in the refractories producer ZAO Podolsk Refractories was increased to 23.5%. Moreover, the third tunnel kiln in Dalian was commissioned in late September, increasing production capacity in China by 20% to 270,000 tonnes.

Read the full press release bellow.

600450 RHI AG: Positive development in the first nine months of 2010 – growth in Brazil, Russia and China glassonweb.com

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