Business
Q1 2025 Trading Update
Q1 2025 Trading Update.
About this update from Rhi Magnesita Nv
[{"type":"text","content":"\n\n7 May 2025\nRHI Magnesita N.V.\n(\"RHI Magnesita\" or \"the Group\")\n \nQ1 2025 TRADING UPDATE\n \nRHI 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 2025 (\"Q1\").\nDownside risks to the 2025 trading outlook have increased, driven by a weak outlook for H1 performance and rising global trade tensions, which could negatively affect the Group's end markets.\nQ1 trading\nFirst quarter trading conditions became more challenging, reflecting lower sales volumes, a continued decline in project business in the glass and non-ferrous metals sectors worldwide and lower pricing for cement and steel markets in India and the Middle East.\nEBITA margins in the first quarter were lower, as expected, impacted by a combination of lower volumes in high-margin project business, weaker finished goods pricing and higher cost of purchased raw material.\nReflecting the demand backdrop, the Group continues to operate its plants at lower levels of capacity utilisation compared to Q4 2024, with fixed cost under-absorption further weighing on margins. As part of its ongoing Network Optimisation Programme (\"NOP\"), the Group has announced the closure of its Wetro plant in Germany. Alongside the NOP, management has initiated additional cost saving measures targeting both Cost of Goods Sold and Selling, General & Administration expenses.\nIn response to higher unit costs, a price increase programme is being implemented to restore margins over the remainder of the year, although securing increases is likely to be more challenging in the current market environment. In particular, India and West Asia markets are experiencing elevated competitive pressure from low-cost imports of refractories from China and overcapacity that has been built in India recently by international and domestic refractory competitors, impacting both margins and sales volumes.\nFinancial position\nAs expected, net debt increased to €1.6 billion as at 31 March 2025, primarily due to the completion of the Resco acquisition and the payment of the remaining €346 million of cash proceeds. This was partially funded by a new €200 million syndicated term loan.\nWorking capital rose modestly, in line with expectations of increased sales in Q2. Guidance for year...