EANS-News: RHI AG / RHI with record-level operating result in the second quarter of 2012

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quarterly report/Half-year financial report 2012

Wien (euro adhoc) - Despite an environment strongly characterized by
uncertainty, RHI realized the second highest quarterly revenues in
the group's history, which were only EUR 2.0 million below the record
level of the fourth quarter of 2011. Both divisions recorded
substantial growth in revenues: revenues of the Steel Division
exceeded the previous record of the third quarter of 2011 by 5.1% and
is primarily attributable to the good performance in Europe and North
America. Revenues in the Industrial Division reached the second
highest level ever recorded in this division, despite the seasonality
of the cement business, and is based on good business developments in
the nonferrous metals and environment, energy, chemicals segments.
Moreover, RHI also reached a new record level in the operating result
since the crisis in 2009.

In detail: In the second quarter of 2012, revenues of the RHI Group
increased by 8.9% in comparison with the same quarter of 2011 and
amounted to EUR 475.9 million. The Steel Division increased its
revenues by 6.0% and the Industrial Division recorded growth of
13.3%. The operating result of the second quarter exceeded the
comparative period of 2011 by 21.8% and, at EUR 48.7 million, reached
a new record level since the recession in the year 2009.
Restructuring expenses of EUR 4.6 million resulted from the partial
closure of a production line at the Bonnybridge plant in Great
Britain. The group's EBIT amounted to EUR 44.1 million in the past
quarter and is 10.3% higher than in the second quarter of 2011
despite the restructuring expenses incurred. The EBIT margin improved
slightly from 9.2% to 9.3%.

Although a dividend of EUR 29.9 million (EUR 0.75 per share) was paid
out, the equity ratio as of June 30, 2012 increased to 26.9%, after
26.7% at March 31, 2012. Cash and cash equivalents fell from EUR
154.1 million to EUR 107.1 million in 2012 due the raw material
projects in Norway and Turkey and investments in a fourth tunnel kiln
in China, the dividend payment and an increase in working capital
compared with the end of the first quarter. Net debt rose from EUR
363.1 million to EUR 424.7 million.

Net cash flow from operating activities rose only marginally in the second
quarter of 2012 to an accumulated EUR 48.4 million (Q1/2012: EUR 45.0 million).
This is primarily attributable to an increase in receivables related to
revenues.
2nd Quarter 1st Half-year
in EUR million 2012 2011 2012 2011
Revenues 475.9 437.1 912.8 850.9
EBITDA 60.6 53.0 108.2 95.4
EBITDA margin 12.7% 12.1% 11.9% 11.2%
Operating result1) 48.7 40.0 82.3 69.2
Operating result margin 10.2% 9.2% 9.0% 8.1%
EBIT 44.1 40.0 77.7 69.2
EBIT margin 9.3% 9.2% 8.5% 8.1%
Profit before income tax 38.1 34.9 73.5 58.6
Profit 30.3 30.7 62.3 49.0
Net cash flow from
operating activities 3.4 2.3 48.4 29.1
Investments in property, plant
and equipment and intangible assets 33.7 10.2 64.2 15.1
Number of employees at end of half-year 8,072 7,796

1) before reversal of impairment losses/impairment losses and
restructuring costs

Steel Division In the second quarter of 2012, revenues in the Steel
Division reached a new record level of EUR 296.8 million, thus
significantly exceeding the figure of EUR 279.1 million in the first
quarter of 2012 and the revenues of EUR 280.1 million in the
comparable period of 2011. The operating result improved
substantially from EUR 12.8 million in the first quarter of 2012 to
EUR 21.9 million in the second quarter of 2012, also exceeding the
result of EUR 20.6 million in the same period of 2011. The operating
result margin, at 7.4%, significantly exceeded that of the previous
quarter at 4.6% and remained stable in comparison with the same
period of 2011. The restructuring expenses resulting from the partial
shutdown of a production line at the Scottish plant Bonnybridge
lowered the EBIT margin by 1.6 percentage points to 5.8%.

Industrial Division At EUR 169.2 million in the second quarter of
2012, revenues in the Industrial Division clearly exceeded the
revenues of the first quarter of 2012 of EUR 143.0 million and those
of the 2011 reference period of EUR 149.3 million. EBIT improved
significantly from EUR 13.1 million in the first quarter of 2012 to
EUR 21.1 million in the second quarter of 2012 and also exceeded the
figure of EUR 18.2 million in the 2011 reference quarter. The EBIT
margin, at 12.5%, was significantly higher than in the previous
quarter with 9.2% and slightly above that of the prior-year period.

Raw Materials Division In the second quarter of 2012, revenues of the
Raw Materials Division amounted to EUR 62.0 million, slightly
exceeding the figure of the first quarter of 2012 of EUR 60.2 million
and significantly exceeding revenues of the 2011 reference period,
which had amounted to EUR 54.8 million. The decline in external
revenues compared with the previous quarter resulting from the expiry
of delivery obligations of the Irish company Premier Periclase Ltd.
(PPL), which had been acquired in 2011, was compensated by higher
internal demand for raw materials as externally purchased raw
materials were replaced by own raw materials. EBIT declined due to a
lack of income from the sale of properties (previous quarter: EUR 2.7
million) from EUR 7.7 million in the first quarter of 2012 to EUR 5.7
million in the second quarter of 2012, but significantly exceeded the
figure of EUR 1.2 million in the comparable quarter of 2011. At 9.2%,
the EBIT margin was lower than in the previous quarter, at 12.8%, and
significantly exceeded that of the prior-year reference period.

Investments The second rotary kiln in Turkey will be commissioned in
late August. Consequently, RHI will have another 70,000 tons of
high-grade sintered magnesia at its disposal. The construction of the
fusing plant in Norway is also progressing. The step-by-step
commissioning of the fusing lines in Porsgrunn, Norway, is expected
to start in September. Full-load operations, with an annual
production of roughly 80,000 tons of seawater-based fused magnesia,
can be expected for November; this will effectively make RHI
self-sufficient in fused magnesia outside of China. In late June, the
fourth tunnel kiln at the RHI Group's largest plant for fired bricks
in China was commissioned.

Outlook In a stable macroeconomic environment and with unchanged
foreign currency exchange rates, RHI expects a slightly lower level
of revenues in the Steel Division than in the first half of 2012 due
to seasonal factors and significantly higher revenues in the
Industrial Division in the second half of the year. Price increases
in combination with a positive contribution to earnings from the
initiated backwards integration projects as well as a higher share of
industrial business should lead to a further increase in the EBIT
margin in the second half of the year, which leads us to expect a
higher EBIT margin in the entire year 2012 than in the previous
financial year.

The half-year financial report 2012 is available on the RHI website
www.rhi-ag.com.

Further inquiry note:
RHI AG
Investor Relations
Mag. Simon Kuchelbacher
Tel: +43-1-50213-6676
Email: simon.kuchelbacher@rhi-ag.com

end of announcement euro adhoc
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company: RHI AG
Wienerbergstrasse 9
A-1100 Wien
phone: +43 (0)50213-6123
FAX: +43 (0)50213-6130
mail: rhi@rhi-ag.com
WWW: http://www.rhi-ag.com
sector: Refractories
ISIN: AT0000676903
indexes: ATX Prime, ATX
stockmarkets: official market: Wien
language: English