Results of the second quarter 2014 – comparative period 2013 includes net income from termination of US Chapter 11 proceedings (ad hoc)

05. August 2014

In the second quarter of 2014, the RHI Group increased its revenues by 8.6% compared with the first quarter of 2014 to € 436.8 million. This is primarily attributable to an increase in business volume in Europe, Russia and the Middle East in the Steel Division and significantly higher revenues in the business unit environment, energy, chemicals.

The operating result rose to € 37.7 million in the second quarter of 2014 after € 34.1 million in the preceding quarter. The operating result margin thus improved slightly to 8.6% in the past quarter. While the Steel and Industrial Divisions raised their operating result margins due to better capacity utilization, the operating result margin of the Raw Materials Division dropped, which was, amongst other things, attributable to damage caused by a fire in Porsgrunn, Norway, and the related restricted availability of the fusion lines.

First half-year In the first half of 2014 the RHI Group’s revenues dropped to € 839.1 million, down 3.6% on the first half of 2013 due to a weaker development of revenues in the first quarter of 2014. The operating result amounted to € 71.8 million in the past quarter. Compared with the operating result of € 76.6 million in the first half of 2013, this corresponds to a decrease by 6.3% and is primarily related to the drop in revenues. The operating result margin decreased from 8.8% in the first half of 2013 to 8.6% in the first half of 2014.

EBIT amounted to € 72.1 million in the first half of 2014 and includes restructuring costs of € 0.5 million resulting from the closure of the plant in Duisburg, Germany, and income from the reversal of provisions amounting to € 0.8 million due to a reassessment of the scope of obligations related to the termination of the US Chapter 11 proceedings in the previous year. In the first half of last year, EBIT included provisions for restructuring of € 19.0 million related to the announced closure of the site in Duisburg, Germany, and net income from the termination of the US Chapter 11 proceedings amounting to € 75.8 million.

Equity amounted to € 485.4 million as of June 30, 2014 after € 485.5 million as of December 31, 2013. The equity ratio improved slightly from 28.2% at the end of the financial year 2013 to 28.3% as of June 30, 2014.

Cash and cash equivalents dropped from € 112.4 million to € 66.9 million, which was due to the dividend payment of € 29.9 million and an increase in working capital compared with December 31, 2013. Net debt consequently rose from € 422.9 million to € 459.2 million. As a result, the gearing ratio increased from 87.1% to 94.6%.

Net cash flow from operating activities amounted to € 12.4 million in the first half of 2014 after € 63.3 million in the comparative period of the previous year. This is primarily attributable to the massive increase in working capital in the second quarter of 2014 as well as payments totaling roughly € 12 million made in the context of the social plan adopted as a result of the closure of the plant in Duisburg, Germany. Net cash flow from investing activities amounted to € (9.4) million in the first half of the year.

Outlook Provided that the macroeconomic environment and exchange rates remain stable, RHI expects similar revenues in the third quarter of 2014 as in the second quarter of 2014, and a significant increase in revenues in the Industrial Division in the fourth quarter of 2014.

As the growth of revenues did not meet internal expectations in the second quarter of 2014 and the industrial business was weaker in comparison with the previous year, especially in the glass and nonferrous metals business units, RHI expects revenues at the prior-year level and an operating result margin between 8% and 9% for the full year 2014.

in € million H1/2014 H1/2013 Delta Q2/2014 Q1/2014 Delta
Revenues 839.1 870.7 (3.6)% 436.8 402.3 8.6%
EBITDA 105.0 168.1 (37.5)% 54.8 50.2 9.2%
EBITDA margin 12.5% 19.3% (6.8)pp 12.5% 12.5% 0.0pp
Operating result 1) 71.8 76.6 (6.3)% 37.7 34.1 10.6%
Operating result margin 8.6% 8.8% (0.2)pp 8.6% 8.5% 0.1pp
EBIT 72.1 133.4 (46.0)% 38.5 33.6 14.6%
EBIT margin 8.6% 15.3% (6.7)pp 8.8% 8.4% 0.4pp
Profit before income taxes 62.6 116.4 (46.2)% 33.8 28.8 17.4%
Profit 42.6 83.3 (48.9)% 22.8 19.8 15.2%

1) EBIT before impairment and restructuring expenses and result from Chapter 11 proceedings