RHI Announces Preliminary 2007 Results (posted 3/20/08)
According to preliminary results, RHI AG increased revenue from continuing operations by more than 11% to €1,485.8 million (~ $2,342.3 million) and the operating result by approximately 23% to €164.3 million (~ $259.0 million) in 2007. According to RHI, with this increase in revenues it has surpassed the growth rates of its customer industries and the refractories market.
The company’s Steel (+9.3%) and Industrial (+15.8%) divisions continuously expanded their business in a good market environment and gained market share in important growth regions. Although raw material, energy and transport costs have continued to rise, RHI managed to raise the EBIT margin from 10.0% in 2006 to 11.1% in 2007. Profit after taxes amounted to €111.0 million (~ $175.0 million), up from €97.1 million (~ $153.1 million) in the previous year. The company’s equity, €95.6 million (~ $150.7 million), was positive again for the first time since the crisis that threatened RHI’s existence due to the asbestos claims in the U.S. in 2001.
Cash flow from operating activities increased by more than 200% to €154.8 million (~ $255.0 million). Free cash flow, at €51.1 million (~ $80.6 million), fell short of the prior-year figure due to the acquisition of Monofrax, as well as the complete takeover of Dolomite Franchi S.p.A. and increased investing activities, in particular in the raw material joint venture in China and the new smelting plant in South Africa.
All of the above data for 2007 are preliminary; the final results and the consolidated balance sheet for 2007 will be published April 25, 2008, following the approval of the balance sheet.
At the annual general meeting to be held May 29, 2008, the RHI management board will propose to carry forward RHI AG’s accumulated 2007 profit in its entirety in order to strengthen equity and with a view to ambitious growth targets. RHI’s objective is to increase revenue to €2.0 billion (~ $3.2 billion) by 2010 through organic growth and targeted acquisitions, to raise its EBIT margin to 12% due to the higher raw material supply rate, and increase its world market share to over 15%.
The record level of incoming orders at the end of December 2007, the newly created company-owned raw material supplies in China, and the general business development in the customer industries indicate a sustained strong business development in 2008.
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