RHI Magnesita, the leading global supplier of refractory products, systems, and solutions, today announces its results for the first half year 2022; the company expands its leadership position in sustainability and reports strong top line and earnings performance.
Video statement from CEO Stefan Borgas and CFO Ian Botha about the Half Year Results:
RHI Magnesita delivered a strong performance in terms of volumes, market share and pricing power in the first half of 2022. With €188 million of EBITA, RHI Magnesita is on track to meet market expectations for the full year.
Freight, energy and raw material costs increased significantly, reflecting global inflation due to supply chain disruption and energy shortages resulting from the rapid recovery of global demand following the COVID-19 pandemic, geopolitical instability and continuing lockdowns affecting port capacity and logistics in key locations. Against this backdrop, revenue increased by 33% to €1,594 million. RHI Magnesita’s steel business outperformed with a 4% increase in refractory volumes compared to a global decrease in steel production volumes of 5%.
Commenting on the results, Stefan Borgas, CEO RHI Magnesita, said: “In the first half of 2022 we further demonstrated the benefits of prioritizing customer deliveries in an environment of continued supply chain volatility. Our investment in inventories to ensure our customers remain supplied with essential refractories has underlined the importance of supply reliability and has enabled us to simultaneously increase prices and gain market share. Following major investments in our production network, SG&A reduction, and progress on our sales strategies, we are in a strong position to maintain our leadership position in the refractory industry and to navigate future challenges.”
The company builds on its sustainability leadership with a further increase in the use of secondary raw materials. In June, RHI Magnesita exceeded its 2025 target and recorded a recycling rate of more than 10%. Each tonne of recycled raw material used avoids the release of approximately two tonnes of CO2 which would otherwise be emitted in the manufacturing process. As such, increasing the usage of recycled raw materials is the fastest route to reduce CO2 emissions in the short term. RHI Magnesita opened a new recycling facility at Mitterdorf in Austria and agreed a joint venture with Horn & Co. Group, the largest collector of secondary raw material in the refractory industry in Europe. This agreement gives RHI Magnesita access to additional quantities of secondary raw material, thus increasing vertical integration and strengthening the company’s local-for-local supply chain. In the longer term, it is intended to grow the business to become a leading supplier of high-quality recycled materials to the broader refractory industry in Europe.
The company’s €50m R&D program on new technology for carbon capture and other solutions is also proceeding according to plan. RHI Magnesita has initiated 9 pilot projects which are in various stages of development. The award of a ‘Gold’ ESG rating by EcoVadis additionally underlines RHI Magnesita’s industry leading capabilities and transparency in sustainability.
Growth in new markets continued, with revenues increasing by 41% and 32% in India and China, respectively. In the first half of 2022, RHI Magnesita’s €46 million investment at Hochfilzen, Austria, was completed, transforming the plant into a new European hub for dolomite-based raw materials. Capacity was also transferred from Kruft to the newly expanded Urmitz plant in Germany, with the ramp up of production ongoing. The company’s investment in its plant in Radenthein is delivering efficiency benefits with further savings expected as new systems are implemented during 2022.
Expectations for full year earnings in 2022 remain unchanged, based on strong demand and order books with six months of visibility for steel and approaching one year for industrial. The outlook for global growth faces challenges from inflation and monetary policy response, labour and energy market tightness and ongoing supply chain disruption.
Following investments in its production network and progress on sales strategies, RHI Magnesita is well positioned to navigate future volatility with a lower cost base and enhanced cash generating potential.
Follow this link to read our full RNS: RHI Magnesita half-year results – 07:00:08 01 Aug 2022 – RHIM News article | London Stock Exchange
For further enquiries, please contact:
Patrizia Pappacena
Head of Corporate Communications and Public Affairs
patrizia.pappacena@rhimagnesita.com
+43 699 1870 6443