RHI starts 2004 with good results (ad hoc)

06. May 2004

The RHI Group reported overall positive sales revenues amounting to EUR 302.3 million (previous year: EUR 298.6 million) in the first quarter of 2004. Consolidated sales revenue thus increased despite the sale and deconsolidation of two Waterproofing companies in 2003. Refractories raised its sales revenue by 2.6% worldwide in the first quarter of 2004, adjusted for currency effects by 8.2%. Insulating improved its sales revenue by 12.3%. The concentration on the core refractories business under the RHI Refractories brand and Insulating, with the lead company Heraklith AG, has once again proven to be the right strategy.

RHI again confirmed the positive earnings trends in the first quarter of 2004. EBITDA amounted to EUR 36.7 million (previous year: EUR 37.7 million), and EBIT, at EUR 25.3 million (previous year: EUR 25,3 million), was at a good level again. The group’s EBIT margin reached 8.4% after 8.5% in the first quarter of the previous year. Net income before income taxes rose by 10% to EUR 16.5 million (previous year: € 15,0 million), and the group’s net income by 24% to EUR 12.4 million (previous year: EUR 10.0 million). The financial result, which continued to improve due to the continuous debt reduction, contributed to this improvement. Undiluted earnings per share rose by 24% to EUR 0.56 as compared to the previous year. Financial liabilities in the RHI Group were reduced by EUR 9.0 million in the first quarter of 2004 and amounted to EUR 287.6 million at March 31, 2004, thus continuing the ongoing debt amortization.The core business RHI Refractories contributed EUR 263.2 million (previous year: EUR 256.6 million) to consolidated sales revenue in the first quarter of 2004, a year-on-year increase by 2.6%, or adjusted for currency effects by 8.2%. Refractories sales volume grew 10.0% to more than 410.000 tons in the reporting period. An EBIT of EUR 29.1 million was achieved (previous year: € 30.1 million), which corresponds to an EBIT margin of 11.1%. Price increases were initiated worldwide by RHI Refractories in order to compensate the significant increase in raw material and freight costs.

Heraklith (Insulating) recorded sales revenues of EUR 39.3 million in the first quarter of 2004, (previous year: EUR 35.0 million), up 12.3% on the same period of the previous year. Business in the high-growth markets of Central and Eastern Europe developed very well. Despite the seasonal business development customary in the industry, Heraklith reported a positive EBIT of EUR 0.1 million (previous year: EUR -1.2 million) in the first quarter for the first time in years. The restructuring measures in sales and overhead structures are fully taking effect on the cost side. Optimizations made on the production side are also about to be finalized and already had an effect on the result in the first quarter.

The level of incoming orders remains good worldwide. The earnings outlook for the RHI Group is overall positive provided that the global economy is not subjected to renewed recessionary or exchange rate pressures. RHI will meet the targets of the capital restructuring again this year and will continue to spur on the group’s positive development with targeted investments.