(Alliance News) - RHI Magnesita NV on Wednesday reported an increase in its first half revenue despite material global supply chain challenges impacting the refractory products supplier.
Shares in RHI Magnesita were down 7.3% to 3,950.00 pence each in London on Wednesday morning.
Pretax profit for the six months ended June 30 was EUR124.6 million, a rise of 77% year-on-year from EUR70.2 million.
The Vienna-based company posted revenue of EUR1.2 billion, up 2.5% from EUR1.17 billion.
The increase in revenue was driven by a stronger steel division, where revenue increased by 5.1% to EUR855 million from EUR814 million, partly offset by the Industrial Division, where revenue was down 3.2% to EUR346 million from EUR357 million.
Material global supply chain challenges in the first half resulted in significant delays and higher freight costs, the firm said.
RHI declared an interim dividend of EUR0.50 pence per share, unchanged from the prior year.
"RHI Magnesita has successfully navigated significant challenges in the first half of the year caused by a sharp rebound in customer demand against a background of delays and cost increases in the global supply chain. We have re-established our inventory levels and are now able to benefit from stronger market conditions and price increases contracted for the second half of the year," said Chief Executive Stefan Borgas.
Sales momentum has continued to build for the second half of the year, with a "strong" order book reflecting increased contracted demand from customers in the steel, cement, glass and non-ferrous metals industries, the company added.
The company said it expects refractory margins to improve in the remainder of 2021 as price increases are implemented against a backdrop of higher raw materials prices, strong demand for refractory products and as adjustments for additional freight costs are passed on to customers.
The group remains on track to achieve 2021 guidance of EUR310 million adjusted earnings before interest, tax and amortization with earnings weighted towards the second half.
By Amrit Sahota; newsroom@alliancenews.com
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RHI Magnesita (RHIM)