RHI Magnesita NV on Thursday backed its full-year outlook despite some weakness in key end markets.
Shares in RHI Magnesita, the Vienna-headquartered manufacturer of refractory products for the processing of steel, glass, and non-ferrous metals, rose 1.9% to 3,685.00 pence each in London on Thursday.
RHI Magnesita said the trading outlook for 2024 remains in line with the guidance issued at the 2023 full year results and the group is on track to meet analyst consensus expectations for the year.
Chief Executive Stefan Borgas said: ‘RHI Magnesita is navigating a challenging demand landscape whilst progressing its strategic priority to grow through consolidation in the fragmented global refractory industry.’
‘Whilst the timing of recovery in other markets is hard to predict and not yet evident, we are confident of being well positioned to meet any increase in customer demand, with significant operational gearing and vertical integration upside potential in the event of a recovery.’
RHI Magnesita noted continuing weakness in the key end markets of construction and transportation resulted in subdued customer demand during the first quarter, with weaker sales volumes and lower pricing as expected, offset by M&A.
The earnings before interest, tax and amortisation margin was in-line with the guidance for around 11% for 2024.
The Ebita contribution from the group’s raw material assets remained at a very low level, due to weak market prices for refractory raw materials, the company added.
However, this was in line with the expected contribution of around 1.0 percentage point of Ebita margin for the year as a whole.
Net debt reduced slightly from the €1.3 billion level reported at the 2023 year end, and leverage remained stable at 2.3 times.
Working capital was at similar levels to the 2023 year end. Guidance for working capital intensity of around 24% at the 2024 year end is maintained, the company said.
RHI Magnesita expects the acquisition of Resco Group to be completed in the second half of 2024.
In April, RHI Magnesita bought Resco, a US based producer of alumina monolithics and basic and non-basic refractories, from Balmoral Funds.
RHI said the deal had an enterprise value of up to $430 million.
Resco operates seven plants and two raw material sites in the US and two plants in the UK and Canada.
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