Business
Q1 2022 Trading Update
Q1 2022 Trading Update.
About this update from Rhi Magnesita Nv
[{"type":"text","content":"\n \n \n RHI Magnesita N.V.\n \n \n (\"RHI Magnesita\" the \"Company\" or the \"Group\")\n \n \n \n Q1 2022 TRADING UPDATE\n \n \n \n \n \n \n RHI Magnesita, the leading global supplier of high‐grade refractory products, systems and solutions, today provides an update on trading for the three months to 31 March 2022 ('Q1').\n \n \n Q1 Trading\n \n Demand remained robust in the first quarter with strong deliveries for both steel and industrial products. Revenues and profitability were materially higher year on year, reflecting both the continued strong demand and the significant price increase programme implemented during 2021, with Q1 EBITA up c.50% year on year (c.40% in constant currency terms), in line with expectations and at similar levels to that achieved in Q4 2021.\n Margins were supported by price increases, including additional energy and freight surcharges which were successfully passed on to customers in Q1. Further price increases are currently being implemented to offset ongoing cost increases. Customers continue to value security of supply over price during a period of renewed disruption in global supply chains.\n As announced in the full year results on 28 February 2022, the Group's activities in the CIS region have been impacted by the conflict in the Ukraine and sanctions applied to its customers in Russia. Approximately 3.5% of Group revenues were generated in the CIS in 2021 and might be fully at risk. Contingency plans have been prepared and are being implemented as an insurance, for example preparing for a switch to alternative fuels at plants should they be impacted by disruption to European natural gas supplies. Additional capital expenditure of €6 million to prepare for this potential scenario will be incurred in 2022.\n \n Financial position\n \n As previously guided, a material reduction in working capital volumes is not expected to occur during 2022 due to ongoing global supply chain disruptions and the need to prioritise customer deliveries, with finished goods coverage ratios at, or close to target levels excluding stock in transit. Working capital requirements are expected to remain high due to the rising cost environment. Working capital intensity is expected to reduce as the benefit of price increases flows through into revenues.\n Due to the elevated inventory levels, the ratio of net...