RHI Magnesita H1 profits up; too early to gauge steel tariff impact
Refractory products maker RHI Magnesita on Thursday said first half earnings before interest, tax and amortisation increased to €229m from €62m.
Revenue rose 24.6% to €1.5bn as higher prices and volume growth in its steel and industrial divisions offset higher input costs.
Steel production growth year-on-year was 4.6%, most notably in Asia, Middle East and Africa, the company said.
“RHI Magnesita's deliveries for steel clients have outperformed the respective trends in North America, South America and Europe. Our businesses in India, Central America and Europe were also strong, with deliveries increasing above 10% in the period, and revenue growth of over 30%,” the company said.
Despite the risk of challenges by a potential tariff trade war on steel, the company said it was on track to meet full year expectations.
"We have seen a continuation of the positive trends we saw in the second half of 2017, the benefits of our high level of vertical integration and the synergies from the merger of RHI and Magnesita in Q4 2017," said chief executive Stefan Borgas.
"Whilst geopolitical challenges could impact the second half and beyond, we believe our geographically diversified production bases and broad customer profile will insulate the group to a large extent.”
“Today, we continue to anticipate that full-year operating results will accrue the benefits from strong pricing, additional merger synergies and network optimisation," he added. RHI recently merged its three Indian subsidiaries.
“It still remains too early to gauge the effects of the imposition of trade tariffs, yet the group believes its diversified production...and client base will insulate any significant impact from these developments, as long as industrial output on a global basis remains unaffected.”