RHI starts 2005 with good results

04. May 2005

In the first quarter of 2005, the RHI Group saw a seamless continuation of the good business and earnings development of the previous year. Moreover, both RHI divisions refractories and insulating showed continued growth. RHI Refractories (refractories) increased revenue by 8.2% worldwide in the reporting period, while Heraklith (insulating) improved revenue by 17.8%. The substantial increase in revenue reported by Heraklith is attributable to the initial consolidation of the Slovenian companies Eurovek and Termo as of February 1, 2005.

RHI also increased earnings in the group significantly on the previous year. EBITDA amounted to € 41.8 million (previous year: € 36.7 million); EBIT, at € 29.0 million (previous year: € 25.3 million), was up 14.6% on the previous year. Profit before income taxes increased by a very positive 48.5% to € 24.5 million (previous year: € 16.5 million) as a result of the improved EBIT and financial result. The financial result was substantially better than in the previous year especially due to the lower interest expenses resulting from the conversions of the RHI convertible bond tranche B and to interest income related to tax refunds. The higher profit before income taxes and a further optimisation of income taxes, which was already evident in the financial statements of 2004, have led to a group profit of € 22.0 million in the first quarter (previous year: € 12.4 million), up 77.4%.

RHI Refractories, the group’s core business, contributed € 284.7 million (previous year: € 263.2 million) to consolidated revenue in the first quarter of 2005, an increase by 8.2%. Refractories sales volume grew 3.1% to 423,000 tonnes. RHI Refractories reported EBIT in the amount of € 32.1 million in the first quarter of 2005 (previous year: € 29.1 million) and an EBIT margin of 11.3% (previous year: 11.1%). Negative effects of the US dollar/euro exchange rate, which deteriorated by about 6% year-on-year, and higher raw materials and energy costs were thus successfully compensated.

Heraklith (insulating division) reported revenue of € 46.3 million in the first quarter of 2005 (previous year: € 39.3 million), up 17.8% on the same period of the previous year. Without the integration of the Slovenian companies Eurovek and Termo, revenue would have been slightly below the figure of the previous year due to the long harsh winter in Western and Eastern Europe. The framework conditions of the construction and construction material markets, which were weak due to the weather, had recovered significantly by April, with recovery effects on the first quarter being clearly visible. EBIT, at € 1.0 million in the first quarter of 2005 (previous year: € 0.1 million), clearly exceeded the figure of the previous year; EBIT margin at 2.2% was low due to seasonal factors.