EANS-Adhoc: RHI AG Results of the second quarter 2015, outlook adjusted
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Mid Year Results
05.08.2015
In the second quarter of 2015, the RHI Group increased its revenue by 12.7%
compared with the first quarter of 2015 to EUR 477.9 million. This is in
particular due to significantly higher revenue in the Steel Division in Europe
and North America as well as in the environment, energy, chemicals, glass and
nonferrous metals business units.
The operating result, at EUR 34.1 million in the second quarter of 2015, is at
the level of the preceding quarter. The market environment of the Steel Division
is characterized by an aggressive export strategy of Chinese steel producers as
a result of a weak domestic market and high excess capacities. This led to high
pressure on steel prices and consequently the profitability of manufacturers and
further on the supply industries. In combination with negative product mix
effects in the linings business, this resulted in a weaker contribution to
earnings by the Steel Division compared with the first quarter of 2015. In
contrast, the Industrial Division significantly increased its operating EBIT due
to the delivery of projects. While the operating EBIT of the first quarter of
2015 still included slightly positive currency translation effects from intra-
group transactions and the measurement of balance sheet items, the second
quarter of 2015 was negatively influenced. The operating EBIT margin of the RHI
Group declined from 8.1% in the first quarter of 2015 to 7.1% in the second
quarter.
First half-year
In the first half of 2015, the RHI Group's revenue was up 7.5% on the
comparative period of 2014 and amounted to EUR 902.0 million. The Steel
Division's revenue rose by 7.3% primarily because of positive currency
translation effects and a strong business development in India. The 11.2%
increase in revenue in the Industrial Division compared with the weak first half
of 2014 is primarily attributable to higher project deliveries in the glass and
environment, energy, chemicals business units.
The operating EBIT amounted to EUR 68.6 million in the first half of the year.
This corresponds to a decline by 4.5% compared with the operating EBIT of EUR
71.8 million in the first half of 2014. This development is primarily
attributable to the Raw Materials Division's low contribution to earnings
resulting from weaker capacity utilization at the raw material plants as well as
falling raw material prices. While the Industrial Division benefited from a
better utilization of fixed costs as a result of higher revenue, a better margin
situation in the glass business unit and several major repairs in the nonferrous
metals business unit, the operating EBIT of the Steel Division declined in the
second quarter of 2015 due to a weaker margin development in Europe and in the
Middle East, as well as to negative product mix effects. The operating EBIT
margin fell from 8.6% in the first half of 2014 to 7.6% in the first half of
2015. EBIT of the first half of 2015 included no extraordinary effects and thus
corresponded to the operating EBIT.
Net cash flow from operating activities amounted to EUR 64.9 million in the
first half of 2015 after EUR 12.4 million in the comparative period of 2014.
Working capital, which consists of inventories and trade receivables less trade
payables and prepayments received, rose by EUR 26.8 million compared with the
end of the year 2014 and amounted to EUR 597.7 million at June 30, 2015. This
increase was amongst other things due to currency effects. Compared with the end
of the first quarter of 2015, however, a reduction by EUR 22.0 million was
recorded in the past quarter, despite a significant increase in revenue.
Net cash flow from investing activities amounted to EUR (2.1) million in the
first half of the year and includes payments related to the sale of securities
due to surplus coverage of the legally required provisions for pensions of two
companies as well as payments from the sale of a 2.6% share in a German
residential property company totaling EUR 13.9 million. Free cash flow thus
amounted to EUR 62.8 million in the first half of 2015 after EUR 3.0 million in
the comparative period of 2014.
Cash and cash equivalents decreased from EUR 151.1 million at December 31, 2014
to EUR 129.6 million due to the dividend payment of EUR 29.9 million, the
working capital build-up and the repayment of non-current financial liabilities.
Net debt declined from EUR 466.9 million at the end of the year 2014 to EUR
448.9 million at June 30, 2015 due to a favorable cash flow development.
Equity amounted to EUR 549.5 million at June 30, 2015 after EUR 493.9 million at
December 31, 2014. The equity ratio rose from 26.5% at the end of the financial
year 2014 to 29.4% at June 30, 2015.
Outlook
The economic framework conditions do not indicate a significant recovery in the
main customer markets for the second half of 2015. Weak domestic demand in China
leads to expectations that export activities for Chinese steel will continue to
increase, which causes an additional burden on our steel customers outside of
China. Important industrial metals such as aluminum, copper, nickel and tin
reached new five-year lows in July 2015. RHI expects a currency-driven increase
in revenue of more than 3% for the year 2015. In this environment and provided
that the exchange rates remain stable, the operating EBIT margin will amount to
roughly 8%, contrary to previous expectations of roughly 9%.
in EUR million 1H/15 1H/14 Delta 2Q/15 1Q/15 Delta
Revenue 902.0 839.1 7.5% 477.9 424.1 12.7%
EBITDA 102.5 104.7 1) (2.1)% 51.3 51.2 0.2%
EBITDA margin 11.4% 12.5% (1.1)pp 10.7% 12.1% (1.4)pp
Operating EBIT 2) 68.6 71.8 (4.5)% 34.1 34.5 (1.2)%
Operating EBIT margin 7.6% 8.6% (1.0)pp 7.1% 8.1% (1.0)pp
EBIT 68.6 72.1 (4.9)% 34.1 34.5 (1.2)%
EBIT margin 7.6% 8.6% (1.0)pp 7.1% 8.1% (1.0)pp
Profit before income tax 63.0 62.6 0.6% 33.1 29.9 10.7%
Profit from continuing operations 44.6 42.6 4.7% 23.5 21.1 11.4%
1) adjusted for income from the reversal of investment subsidies recognized as
liabilities
2) EBIT before impairment and restructuring expenses and result from Chapter 11
proceedings
The report for the first half of 2015 is available for download at the RHI
website: www.rhi-ag.com/ Investor Relations / Financial Reports
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)50213-6676
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