LONDON (ShareCast) - (Sharecast News) - RHI Magnesita reported a marked improvement in profitability over the four months to 31 October on Monday, in line with full-year guidance, as cost-cutting measures and integration benefits from recent acquisitions offset continued weakness in steel demand.
The FTSE 250 global refractory producer reported adjusted EBITA of €136m for the July-to-October period, equivalent to a 12.7% margin, up from €141m and an 8.4% margin in the first half.

It said the improvement came despite the third quarter's typical seasonal slowdown.

Steel volumes remained subdued but stable, with only modest improvement from the first half.

Demand for high-quality steel used in the automotive sector was particularly weak in Western markets, while India and the META region - covering the Middle East, Africa and Türkiye - saw growth.

European demand contracted further, though RHI Magnesita said it re-established market share in India during the period.

The group said its industrial project order book continued to improve, providing clear visibility for the remainder of 2025, although order volumes remained around 40% below recent years.

Pricing conditions stayed competitive, particularly in markets facing Chinese overcapacity, but RHI Magnesita achieved small price increases supported by its local-for-local supply model and 4PRO contracts.

Cost-efficiency measures, including two plant closures in Germany, accounted for much of the margin gain, while integration of the former Resco plants in North America progressed smoothly.

Local production in the US rose to 65% this year and is expected to exceed 75% in the second half of 2026, helping offset tariff exposure.

Backward integration margins remained near historical lows at 1.1%, reflecting weak raw-material prices, though the company said further cost-reduction actions were under way at its mines and raw-materials plants.

Working capital increased temporarily to support deliveries into a stronger fourth-quarter order book, and RHI Magnesita expects to reduce leverage to about 3.0x by year-end.

The group reaffirmed its full-year adjusted EBITA guidance of €370m to €390m, underpinned by market-share recovery in India and META, cost-reduction progress and seasonal recovery in China, although the weak US dollar and Indian rupee remain headwinds.

"RHI Magnesita has delivered the expected step-up improvement through the second half of 2025 by systematically implementing its self-help actions," said chief executive Stefan Borgas.

"This is despite subdued demand conditions.

"The group has successfully executed cost reduction initiatives in all cost categories, progressed plant closures, and captured synergies from the Resco acquisition."

Borgas said market share in India had been re-established, while modest pricing discipline was supporting results despite "intense" competition.

"I would like to thank the RHI Magnesita-team globally for this outstanding operational performance.

"Looking ahead, our self-help actions and innovation projects underpin confidence that the momentum from the second half of 2025 will carry into the first half of 2026."

At 0847 GMT, shares in RHI Magnesita were up 15.85% at 2,310p.

Reporting by Josh White for Sharecast.com.

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