RHI increases half-year revenue and profit

28. July 2005

The RHI Group recorded a good business and earnings development in the second quarter of 2005, with both RHI divisions experiencing a positive development. RHI Refractories increased revenue by 11.0% worldwide in the reporting period, while Heraklith improved revenue by 35.2%, which was largely attributable to the consolidation of the companies Eurovek and Termo at February 1, 2005.

Overall, the RHI Group reported revenue in the amount of € 711.0 million in the first half of 2005 (previous year: € 632.0 million), an increase by 12.5%. RHI also increased earnings significantly on the previous year. EBITDA amounted to € 88.1 million (previous year: € 79.7 million); EBIT, at € 62.0 million (previous year: € 55,7 million), was up 11.3% on the previous year. Profit before income taxes increased by 25.0% to € 48.7 million (previous year: € 39.0 million) as a result of a once again improved financial result. The higher profit before income taxes and a further optimization of income taxes based on the use of loss carryforwards, which was already evident in the financial statements of 2004, led to a group profit of € 43.8 million (previous year: € 18.1 million) in the first half, up 142.0%.

RHI Refractories, the group’s core business, contributed € 596.8 million (previous year: € 544.3 million) to consolidated revenue in the first half of 2005, an increase by 9.6%. Refractories sales volume grew 3.0% to 856,000 tonnes. RHI Refractories reported EBIT in the amount of € 66.5 million (previous year: € 60.7 million) in the first half of 2005 and an EBIT margin of 11.1% (previous year: 11.2%). Negative effects of the US dollar/euro exchange rate, which deteriorated by about 4% year-on-year, and higher raw materials and energy costs were thus successfully compensated.

Heraklith(insulating division) reported revenue of € 110.5 million (previous year: € 86.8 million) in the first half of 2005, up 27.3% on the same period of the previous year, which was largely attributable to the integration of the Slovenian companies Eurovek and Termo, which were consolidated at February 1, 2005. EBIT, at € 6.0 million (previous year: € 2.8 million) in the first half of 2005, exceeded the figure of the previous year significantly due to the integration of Eurovek and Termo and continuous cost cuts at the plants and despite higher raw material costs; at 5,4%, the EBIT margin also clearly surpassed the prior-year figure of 3.2%.

The earnings outlook for the RHI Group is positive; incoming orders in the first half of 2005 overall exceeded the level of the previous year. The business volume of RHI Refractories will stabilize at a high level, with the development of the steel cycle and the US dollar remaining important factors for business success. Heraklith will benefit from the final reorganization of the participating interests in Slovenia and continue to improve earnings as compared to the previous year.