RHI Magnesita, a leading global supplier of high grade refractory products, systems and solutions, delivered a resilient set of results for the first six months of 2024, against a challenging market backdrop which was largely dominated by declining sales volumes for both steel and industrial divisions, and lower average pricing. Revenue decreased by 0.3 per cent whilst adjusted EBITA declined five per cent on the prior period to €190 million (H1 2023: €200 million).
RHI Magnesita’s adjusted EBITDA contribution from M&A of €34 million represented progress towards the full year guidance of c.€80 million and the company expects synergy benefits to fall into H2, whilst demand and pricing conditions will be at a similar level to the base business. The company has continued to drive forward on its commitment to recycle and reuse spent refractories across the business, with its recycling rate increasing to 13.2 per cent compared to 13.0 per cent in H1 2023, as the company continues towards its revised 15.0 per cent target rate by 2025.
Stefan Borgas, chief executive officer, said: “Demand for refractories was weaker than forecast in the first half of 2024 as conditions in the global construction, transportation and other key end markets remained subdued. We have taken appropriate measures to safeguard profitability and cash generation throughout this period, as demonstrated by the release of €86 million of working capital in the first half of the year and the delivery of our EBITA margin guidance at 11.0 per cent. Record refractory margins compensated for the temporarily lower contribution from our raw material assets. We remain on track to achieve full year guidance despite the weak external market conditions experienced in the first half, with higher sales volumes anticipated in the remainder of the year.”
In terms of outlook for 2025, the company says refractory demand remains subdued in all key geographies, except for India, following a period of weaker than forecast steel output in the first half of the year and reduced activity in the key end markets of construction and transportation.
However, RHI Magnesita remains on track to achieve Adjusted EBITA of at least €410 million at a margin of 11.0 per cent in 2024, as previously guided, based on normal seasonality in the cement market in Q4, a higher weighting of steel sales volumes in the second half and unit cost savings resulting from increased capacity utilisation and efficiency measures. Find out more at www.rhimagnesita.com.
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