Vesuvius performance on track despite ongoing operational set backs

Vesuvius PLC on Thursday said it expects annual trading profit to remain broadly flat, as strong performances in its Flow Control and Foundry division, offset operational issues and challenging pricing conditions in Europe.

The London-based molten metal flow engineering company said steel production outside China, Ukraine, Russia and Iran increased 3.1% in the nine months ended September 30. It noted positive momentum in North America, South-East Asia and India, while output in Europe, the Middle East and Africa, and South America remained below year-earlier levels.

Revenue and trading profit in Flow Control, its steel-casting equipment manufacturing division, were ahead of the prior year on a constant currency basis and in line with expectations, despite unmet demand in North America resulting from operational issues.

"Overall, positive net pricing and cost savings have more than offset lower volumes," Vesuvius explained

In Foundry, its metal-casting consumables and equipment division, revenue and trading profit continued to improve and were ahead of the prior year, reflecting benefits from the integration of the Molten Metal Systems acquisition alongside growth in the underlying business.

However, profitability in Advanced Refractories, its division responsible for producing industrial furnace lining materials, remained significantly affected by operational issues in North America and India, alongside challenging pricing conditions in Europe.

The operational issues, which began in May and affected its North American sites, have largely been addressed, Vesuvius said, with production backlogs materially reduced.

"We remain confident that these issues will be substantively resolved by the year end. In India, we have continued to see improving stability in our manufacturing site in Vizag," Vesuvius added.

Looking ahead, Vesuvius expects financial 2026 trading profit to be broadly in line with financial 2025 on a constant currency basis.

The company remains on track to deliver at least £55 million in cost savings by 2028, including around £10 million in 2026.

Vesuvius shares closed at 468.00 pence, down 0.2% on Thursday in London.

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