Honeywell International Inc. has paid USD 20 million to RHI Refractories Holding as agreed by contract, after NARCO, a company currently operating under US Chapter 11 and deconsolidated by RHI at the end of 2001, submitted an adjusted plan of reorganization, which was accepted by Honeywell, to the court in Pittsburgh.
Honeywell contractually agreed in early 2002 to pay a total of USD 60 million to RHI once certain requirements related to NARCO’s Chapter 11 proceedings were met. The remaining USD 40 million are due when the Chapter 11 proceedings of NARCO are completed successfully. From today’s perspective, this is expected for 2006.
The USD 20 million payment, which corresponds to nearly EUR 17 million, will be accounted for in RHI’s earnings before interest and taxes (EBIT) 2005. Overall, the RHI Group’s EBIT 2005 including this payment is currently expected to be slightly below the prior-year figure of EUR 135.6 million. EBIT of the Refractories division (RHI Refractories) 2005 will decline on the previous year due to increased energy and raw material costs; EBIT from the Insulating division (Heraklith) will exceed the figure of the previous year significantly. Holding/other will remain at the level of the previous year.
Thus, RHI’s profit after income taxes is thus expected to be slightly below the figure of the previous year.
Following a temporary decline in the third quarter of 2005, the level of incoming refractories orders has now substantially improved again. Based on the successful implementation of price increases to cover further increased raw material and energy costs, RHI aims at a two-digit EBIT margin in 2006.