EANS-News: RHI AG / Preliminary results 2016

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annual result

The RHI Group's revenue amounted to EUR 1,651.2 million in the past
financial year compared with EUR 1,752.5 million in the year 2015.
This decline is primarily attributable to the continued moderate
steel production and lower project deliveries in the business
segments outside the steel industry.

The operating EBIT amounted to EUR 123.2 million in the past
financial year and was maintained at the level of 2015 despite weak
markets and one-off costs of roughly EUR 12 million related to the
planned combination with Magnesita. This positive operating business
development is predominantly attributable to the good earnings
situation in the Steel Division, the improved operating EBIT in the
Raw Materials Division due to good capacity utilization at the
Austrian raw material plants and cost reductions in all areas of the
company.

EBIT amounted to EUR 116.1 million in the past financial year and
includes a full impairment of the assets of the two production sites
for fused cast products for the glass industry totaling EUR 8.0
million. Moreover, negative effects on earnings of EUR 4.6 million
from the deconsolidation of the US subsidiary RHI Monofrax, LLC
following its sale and EUR 4.8 million related to the social plan for
personnel cuts and the reorganization of the production portfolio at
the Norwegian site in Porsgrunn are included. In contrast, a positive
effect of EUR 10.1 million resulted from the measurement of the power
supply contract in Norway.

Finance costs amounted to EUR (21.2) million in the year 2016 and the
tax rate was 28.3%. Profit after income taxes amounted to EUR 75.9
million and earnings per share to EUR 1.86.

Financial and asset position Due to the further reduction of working
capital by roughly 13% and the good operating performance, free cash
flow of EUR 109.8 million was generated and net financial liabilities
were reduced from EUR 397.9 million in 2015 to EUR 332.8 million in
2016. Net financial liabilities correspond to roughly 1.8 times the
EBITDA of the year 2016. The RHI Group's equity amounted to EUR 524.0
million at December 31, 2016 compared with EUR 491.4 in the previous
year. The equity ratio improved from 27.2% to 29.2% in the year 2016.

Steel Division The Steel Division's sales volume rose by 4.9% from
roughly 1,152,000 tons in the previous year to roughly 1,209,000 tons
in the past financial year. This is primarily attributable to a
significant expansion of business in the basic mixes segment, the
most important segment in terms of volume. In addition to a major
contract in Ukraine, the improved utilization of electric steel
plants also contributed to this development. Revenue declined by 2.6%
from EUR 1,099.9 million in the previous year to EUR 1,071.4 million
despite the increase in sales volume, above all due to product mix
effects. This is attributable to a weaker business development in
South America, Europe and China and to the extension of the product
portfolio by lower-performance products. Although these products
support the development of sales volume and margins, they lead to
lower revenue because of the lower price level. The operating EBIT
improved from EUR 64.3 million in the previous year to EUR 76.2
million in the past financial year due to better utilization of the
production capacities and a positive margin development in nearly all
regions. It includes external costs of roughly EUR 8 million for the
financial year 2016, which are related to the planned combination of
RHI und Magnesita.

Industrial Division Sales volume in the Industrial Division declined
by 3.4% compared with the previous year and is attributable to lower
deliveries in nearly all business units. Revenue dropped by 12.4%
from EUR 614.6 million in the previous year to EUR 538.6 million. In
the cement/lime business unit, these reductions result from the lack
of new construction projects and a declining construction industry in
China, and in the glass business unit from the sale of the US
subsidiary RHI Monofrax, LLC in June 2016. In the environment,
energy, chemicals business unit, a major contract in the coal and
petroleum coke gasifier segment in India delivered in the previous
year was not compensated. The decline in revenue in the nonferrous
metals business unit is based on weaker demand in the important
copper and nickel segment. The operating EBIT dropped from EUR 65.0
million in 2015 to EUR 44.5 million in the past financial year due to
lower deliveries and the resulting weaker utilization of production
capacities. It includes external expenses of roughly EUR 4 million in
the year 2016, which are related to the planned combination of RHI
and Magnesita.

Raw Materials Division The Raw Materials Division's external sales
volume rose significantly from roughly 297,000 tons in the previous
year to roughly 342,000 tons in the past financial year. The increase
by 15.2% is above all attributable to the increase in the sale of raw
dolomite in Italy, which makes a large contribution in terms of
volume. However, due to the low price per ton, the contribution in
terms of value is minor. Revenue decreased by 2.4% from EUR 272.6
million in the previous year to EUR 266.0 million in the past
financial year. The operating EBIT turned around from EUR (5.2)
million to EUR 2.5 million in the past financial year, mainly because
of the good capacity utilization at the two Austrian raw material
plants, which predominantly produce basic mixes for the steel
industry, especially for the use in electric arc furnaces. This is an
immediate effect of the Steel Division's increase in sales volume in
this product segment by more than 9% compared with the previous year
to more than 500,000 tons.

Outlook In its forecast published in January 2017, the International
Monetary Fund expects global economic growth of 3.4% in the current
year after 3.1% in 2016. However, there is considerable uncertainty
regarding the effects of the policies of the newly elected US
government. Although the environment in the advanced economies
improved in the second half of 2016, the pace of growth in the
emerging markets will continue to exercise a significant influence on
the global economic situation. Based on a study of mid-November 2016,
the research institute CRU expects steel production in China to
decline by roughly 2% in the year 2017 and steel production outside
China to grow by an ambitious 6%. The emerging markets are also among
the main drivers in this area. Based on these estimates, RHI expects
a more positive market environment in 2017. The focus will stay on
the generation of free cash flow in the current financial year in
order to reduce net debt further. RHI is currently working on meeting
the conditions precedent to the successful closing of the planned
combination with Magnesita and is preparing the integration of the
two companies. In the context of these activities, external costs
will be incurred. The Management Board of RHI AG intends to propose a
dividend of EUR 0.75 per share to the Annual General Meeting on May
5, 2017, the same as in the previous year.

Preliminary Key Figures 2016

2016 2015 Delta 4Q/16 4Q/15 Delta
Sales volume (thousand tons) 1,979 1,892 4.6% 511 488 4.7%
Steel Division 1,209 1,152 4.9% 300 269 11.5%
Industrial Division 428 443 (3.4)% 131 136 (3.7)%
Raw Materials Division 342 297 15.2% 80 83 (3.6)%

in EUR million
Revenues 1,651.2 1,752.5 (5.8)% 423.9 440.0 (3.7)%
Steel Division 1,071.4 1,099.9 (2.6)% 268.2 257.8 4.0%
Industrial Division 538.6 614.6 (12.4)% 145.1 171.2 (15.2)%
Raw Materials Division
External revenues 41.2 38.0 8.4% 10.6 11.0 (3.6)%
Internal revenues 224.8 234.6 (4.2)% 51.7 49.9 3.6%
EBITDA 189.1 140.0 35.1% 40.4 (2.3) 1,856.5%
EBITDA margin 11.5% 8.0% 3.5pp 9.5% (0.5)% 10.0pp
Operating EBIT 1) 123.2 124.1 (0.7)% 25.2 32.7 (22.9)%
Steel Division 76.2 64.3 18.5% 13.1 13.6 (3.7)%
Industrial Division 44.5 65.0 (31.5)% 13.9 24.3 (42.8)%
Raw Materials Division 2.5 (5.2) 148.1% (1.8) (5.2) 65.4%
Operating EBIT margin 7.5% 7.1% 0.4pp 5.9% 7.4% (1.5)pp
Steel Division 7.1% 5.8% 1.3pp 4.9% 5.3% (0.4)pp
Industrial Division 8.3% 10.6% (2.3)pp 9.6% 14.2% (4.6)pp
Raw Materials Division 2) 0.9% (1.9)% 2.8pp (2.9)% (8.5)% 5.6pp
EBIT 116.1 37.5 209.6% 15.0 (53.9) 127.8%
Steel Division 76.3 63.4 20.3% 13.2 12.7 3.9%
Industrial Division 32.0 58.9 (45.7)% 6.0 18.2 (67.0)%
Raw Materials Division 7.8 (84.8) 109.2% (4.2) (84.8) 95.0%
EBIT margin 7.0% 2.1% 4.9pp 3.5% (12.3)% 15.8pp
Steel Division 7.1% 5.8% 1.3pp 4.9% 4.9% 0.0pp
Industrial Division 5.9% 9.6% (3.7)pp 4.1% 10.6% (6.5)pp
Raw Materials Division 2) 2.9% (31.1)% 34.0pp (6.7)% (139.2)% 132.5pp
Net finance costs (21.2) (19.3) (9.8)% (4.7) (3.3) (42.4)%
Share of profit of joint
ventures 10.9 9.2 18.5% 3.5 2.5 40.0%
Profit before income tax 105.8 27.4 286.1% 13.8 (54.7) 125.2%
Income taxes (29.9) (9.8) (205.1)% (1.9) 16.3 (111.7)%
Income taxes in % 28.3% 35.8% (7.5)pp 13.8% 29.8% (16.0)pp
Profit for the year 75.9 17.6 331.3% 11.9 (38.4) 131.0%

Earnings per share in EUR 3) 1.86 0.40 0.29 (0.98)

1) EBIT before losses of derivatives from supply contracts,
impairment losses and restructuring effects 2) based on internal and
external revenues 3) basic and diluted

Preliminary key figures (in EUR million) 2016 2015 Delta
Balance sheet total 1,792.2 1,804.5 (0.7)%
Equity 524.0 491.4 6.6%
Equity ratio (in %) 29.2% 27.2% 2.0pp
Investments in PP&E and intangible assets 70.8 80.8 (12.8)%
Net debt 332.8 397.9 (16.4)%
Gearing ratio (in %) 63.5% 81.0% (17.5)pp
Net debt / EBITDA 1.8 2.8 (1.0)
Working capital 465.1 532.6 (12.7)%
Working capital (in %) 28.2% 30.4% (2.2)pp
Capital employed 1,095.8 1,176.5 (6.9)%
Return on average capital employed (in %) 7.6% 2.3% 5.3pp
Net cash flow from operating activities 162.7 175.4 (7.2)%
Net cash flow from investing activities (52.9) (47.2) (12.1)%
Net cash flow from financing activities (80.7) (124.4) 35.1%

Gearing ratio: net debt / equity
Working Capital: Inventories + Trade receivables and receivables from long-term
construction contracts - Trade payables - Prepayments received
Capital Employed: Property, plant and equipment + Goodwill + Other intangible
assets + Working Capital
Return on average capital employed: (EBIT - Taxes) / average Capital Employed

Further inquiry note:
RHI AG
Investor Relations
Mag. Simon Kuchelbacher
Tel: +43-1-50213-6676
Email: simon.kuchelbacher@rhi-ag.com

end of announcement euro adhoc
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company: RHI AG
Wienerbergstrasse 9
A-1100 Wien
phone: +43 (0)50213-6676
FAX: +43 (0)50213-6130
mail: rhi@rhi-ag.com
WWW: http://www.rhi-ag.com
sector: Refractories
ISIN: AT0000676903
indexes: ATX Prime, ATX
stockmarkets: official market: Wien
language: English

Original-Content von: RHI AG, übermittelt durch news aktuell