Business
Q3 2021 Trading update and acquisition of SÖRMAS
Q3 2021 Trading update and acquisition of SÖRMAS.
About this update from Rhi Magnesita Nv
[{"type":"text","content":"\n \n \n \n RNS Number : 4494P\n RHI Magnesita N.V.\n 19 October 2021\n \n \n \n \n \n \n \n RHI Magnesita N.V.\n \n \n (\"RHI Magnesita\" or the \"Company\" or \"Group\")\n \n \n Q3 2021 TRADING UPDATE\n \n \n AND\n \n \n ACQUISITON OF SÖRMAŞ\n \n \n \n \n \n RHI Magnesita today issues its trading statement in respect of the three-month period to 30 September 2021.\n \n \n Trading update\n \n \n Demand has continued to be strong for both the Steel and Industrial businesses, with the Group's raw material assets and refractory plants operating at high capacity utilization and order book visibility extending into the first quarter of 2022. \n \n \n Whilst the Group saw improved earnings momentum in September, benefiting from higher prices, profitability in Q3 was in line with H1 2021 due to the impact of further increases in costs. \n \n \n In addition, sales volumes for high margin refractories mainly for use in non-ferrous metals projects were impacted by lower output from the Group's Radenthein plant in Austria, where the temporary closure of one tunnel kiln for unscheduled maintenance during the quarter will adversely impact H2 2021 EBITA by around €8 million. The plant is now fully operational.\n \n \n Prices for magnesite-based raw materials in Q3 were in line with the first half of 2021.\n \n \n Responding to supply chain challenges\n \n \n The supply chain position remains challenging in all territories with the Group seeing further increases in the cost of sea freight and demurrage, together with rising energy and consumables costs. Supply chain delays caused by low freight reliability impacted production schedules and deliveries and there was continued use of air freight when necessary to ensure customer supply.\n \n \n Price increases\n \n \n In response to higher costs, the Group has implemented significant customer price increases, with a forecast revenue benefit from agreed increases of \n €\n 100 million so far in 2021. Further price increases are being negotiated, with a potential additional revenue benefit of up to €30 million in 2021.\n \n \n Whilst these increases are being achieved without loss of market share and will support the Group's profitability in Q4, higher pricing is mostly applied to new orders and there is a time delay before margins can be restored...