The RHI Group’s business and earnings development in the third quarter of 2005 was characterized by temporarily lower output in the steel industry in Europe and North America and higher energy costs at RHI Refractories. At Heraklith (Insulating), the very positive development continued unabated as a result of the complete integration of all east European subsidiaries, in particular the Slovenian subsidiary Termo, which has now become possible. Overall, the RHI Group reported revenue in the amount of € 1,073.2 million (previous year: € 958.8 million) in the first three quarters of 2005, an increase by 11.9%. RHI increased EBITDA to € 132.1 million (previous year: € 124.8 million); EBIT, at € 92.6 million (previous year: € 88,8 million), was up 4.3% on the previous year. Profit before income taxes rose by 11.8% to € 71.9 million (previous year: € 64.3 million) as a result of the once again improved financial result. Due to the optimization of income taxes, which was already evident in the financial statements of 2004, profit rose by 74.9% to € 64.7 million (previous year: € 37.0 million).
RHI Refractories reported EBIT in the amount of € 90.5 million (previous year: € 91.4 million) and an EBIT margin of 10.2% (previous year: 11.2%) in the first three quarters of 2005. The Heraklith Group EBIT, at € 14.3 million (previous year: € 7.6 million), was up 88.3% on the previous year; the EBIT margin also rose substantially to 7.9% (previous year: 5.6%).
The earnings outlook for the RHI Group is positive. Incoming orders exceed the level of the previous year in both of RHI’s divisions. The business volume of RHI Refractories will meet the high level of the first half of 2005. In addition to industry cycles, especially in the steel industry, and currency exchange rates in the different economic areas, a further consolidation and restructuring of RHI’s client industries play a significant role in the business success of the Refractories segment worldwide. RHI expects an overall positive market environment in 2006. However, this expectation is tempered by the contrary development of the energy and raw material markets. The Heraklith Group will continue to benefit considerably from the successful reorganization of the ownership status in Slovenia. In addition, Heraklith will increase business volume and earnings through investments in Eastern Europe and continue to improve earnings quality.