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RHI Magnesita, the leading global supplier of refractory products, systems, and solutions, today announces its results for the first half year 2021. The company reports strong revenue momentum supported by high customer demand, offset by margin headwinds due to supply chain disruptions.
Commenting on the results, Chief Executive Officer, Stefan Borgas, said: “RHI Magnesita has successfully navigated significant challenges in the first half of the year caused by a sharp rebound in customer demand against a background of delays and cost increases in the global supply chain. Throughout, we have prioritized the sourcing and delivery of products for our customers. We have re-established our inventory levels and are now able to benefit from stronger market conditions and price increases contracted for the second half of the year. We are continuing to progress our cost saving initiatives and are also seeing real benefits from our sales strategies.”
The health and safety of all employees is RHI Magnesita’s top priority. The company follows a preventative approach to workplace safety and consistently achieves low injury rates. COVID-19 remained a challenge during the last months. RHI Magnesita assisted its employees and their families by issuing medical supplies and covering the cost of vaccination, when available. The total recordable injury frequency rate slightly increased to 0.6 per 200,000 hours worked (H1 2020: 0.5).
Revenue for the first half of 2021 was €1,200 million, an increase of 2.5% compared to the first half of 2020 on a reported basis. RHI Magnesita has navigated the significant challenges resulting from the COVID-19 pandemic and ensuing supply chain disruption and has progressed its longer-term strategic initiatives to build a stronger business as end markets recover.
RHI Magnesita’s ability to respond to the marked uptick in demand was hindered by industry-wide sea freight challenges. These included significantly reduced reliability of freight and elevated freight costs, and contributed to reduced raw material supplies, logistical difficulties, and long lead times. Mitigating actions have been implemented to meet strong contracted customer demand in H2, including increased inventory levels of both finished goods and raw materials, and the implementation of refractory price increases, including pass through of freight surcharges.
Sustainability is fundamental to RHI Magnesita’s long term strategy. The €50 million R&D investment towards CO2 reduction technologies is progressing well. The company commenced a partnership with Calix Limited to develop a Calix Flash Calciner at an RHI Magnesita site for the capture and storage of CO2.
Good progress has been made towards achieving our use of secondary raw material target of 10% by 2025, with use of secondary raw material increasing to 6.1% in H1 2021 (FY 2020: 5%). Engagement with customers on this topic is constantly improving.
Sales momentum has continued to build for the second half of the year, with a strong order book reflecting increased contracted demand from customers in the steel, cement, glass, and non-ferrous metals industries. Refractory margins are expected to improve in the second half-year as price increases are implemented against a backdrop of higher raw materials prices, strong demand for refractory products and as adjustments for additional freight costs are passed on to customers. Overall, RHI Magnesita remains on track to achieve 2021 guidance of €310 million Adjusted EBITA, with earnings weighted towards the second half.
Follow this link to read the full RNS: https://www.londonstockexchange.com/news-article/RHIM/half-year-report/15075748
About RHI Magnesita
RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are critical for high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals, and glass. We master heat, enabling global industries to build sustainable, modern life. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers around the world, with around 12,000 employees in 28 main production sites and more than 70 sales offices. RHI Magnesita intends to build on its leadership in revenue, scale, product portfolio and diversified geographic presence to expand further in high growth markets.
The Group maintains a premium listing on the Official list of the London Stock Exchange (symbol: RHIM) and is a constituent of the FTSE 250 index, with a secondary listing on the Vienna Stock Exchange (Wiener Börse). For more information please visit: www.rhimagnesita.com