Record revenues and improved profitability in second quarter 2011

04. agosto 2011

RHI recorded all time high quarterly revenues in the second quarter of 2011, exceeding the record level of the second quarter of 2008 by more than 5%, in spite of an environment strongly characterized by insecurity. The Steel Division’s revenues were roughly 7% higher than the record figure of the third quarter of 2008. With record revenues in the nonferrous metals and environment, energy, chemicals segments, revenues of the Industrial Division were only slightly below the peak value of the fourth quarter of 2008.

In comparison with the reference quarter of 2010, the RHI Group’s revenues increased by 9.7% to € 437.1 million in the second quarter of 2011. The Steel Division recorded a 13.2% growth in revenues; in the Industrial Division growth amounted to 3.1%. Second quarter 2011 sales volumes amounted to 503,194 metric tons compared with 551,711 metric tons in the second quarter of 2008. The significant revenue per metric ton increase is primarily attributable to the increase in prices, which were necessary due to the rise in raw material costs in 2010.

The operating result of the second quarter, at € 40.0 million, remains at the level of the comparable period of 2010 of € 40.8 million, with the second quarter of 2010 containing a positive one-off effect of € 7.9 million. The operating result margin, at 9.2%, thus still lagged behind that of the comparable quarter of 2010 at 10.2%. In comparison with the first quarter of 2011, the RHI Group increased revenues by 5.6% and the operating result by roughly 37% in the second quarter of 2011. The operating result margin of 7.1% of the first quarter of 2011 was raised by 200 basis points.

The tax rate in the second quarter amounted to 12.0% (Q1/2011: 22.8%); the cash tax rate rose from 16.0% in the first quarter to 25.8% in the second quarter due to advance tax payments for the year 2011 and tax payments for the year 2010.

At the balance sheet date on July 1, 2011 the equity ratio amounted to 22.5%, remaining unchanged compared to the first quarter as dividend payment almost completely offset the gain in retained earnings for the quarter. Cash and cash equivalents were also nearly unchanged in comparison with the end of the first quarter of 2011 and equaled € 86.6 million. Net debt rose from € 318.3 million to € 346.9 million, which was primarily attributable to the dividend payment of roughly € 20 million in May.

Net cash flow from operating activities increased only marginally in the second quarter of 2011 to cumulated € 29.1 million (Q1/2011: € 26.8 million). This is primarily attributable to an increase in receivables related to higher revenues.

          2nd Quarter        1st Half-year
in € million 2011 2010 2011 2010
Revenues 437.1 398.5 850.9 740.7
EBITDA 53.0 52.2 95.4 97.1
EBITDA margin 12.1% 13.1% 11.2% 13.1%
Operating results 1) 40.0 40.8 69.2 74.4
Operating results margin 9.2% 10.2% 8.1% 10.0%
EBIT 40.0 38.6 69.2 70.3
EBIT margin 9.2% 9.7% 8.1% 9.5%
Profit before income taxes 34.9 34.9 58.6 61.7
Profit for the year 30.7 27.6 49.0 49.1
Net cash flow from operating activities 2.3 (6.2) 29.1 16.2
Investments in property, plant and equipment
and intangible assets (10.2) (9.3) (15.1) (14.5)
Number of employees at end of half-year 7,796 7,258

1) EBIT before restructuring costs

Steel Division

In the second quarter of 2011, RHI’s Steel Division increased revenues by 6.6% compared to the first quarter, thus clearly outperforming world steel production with an increase of 2% in the reference period. The operating result improved from € 6.1 million to € 20.6 million, with the result of the previous quarter being strongly influenced by negative foreign currency effects. The operating result margin amounted to 7.4%, significantly above the margins of the previous quarters.

Industrial Division

Although the winter repair business in the cement industry ran out in the second quarter, the Industrial Division raised revenues to € 149.3 million, up 3.3% on the first quarter of 2011. Compared to the second quarter of the previous year, the increase was 3.1%. The operating result in the second quarter equaled € 18.2 million; the operating result margin amounted to 12.2%, versus 10.9% in the previous quarter. On June 16, 2011 the acquisition of the Russian refractories manufacturer ZAO Podolsk Refractories was finalized. Starting in 2012, the product quality on site will be gradually improved as part of an investment and technology transfer program.

Raw Materials Division

The Raw Materials Division reported revenues of € 54.8 million in the second quarter of 2011, versus € 40.6 million in the prior-year period. The operating result amounted to € 1.2 million in the reporting period, which corresponds to a margin of 2.2%.


In a stable macro-economic environment with unchanged foreign currency exchange rates, RHI expects revenues comparable to the first half in the second half of the year 2011. RHI assumes that in the third quarter the EBIT margin will be comparable to the second quarter 2011. In the fourth quarter of 2011 the EBIT margin for the RHI Group will rise to 9.5%.