RHI Magnesita shares were up 5.7% to 2,370p in late afternoon trading on Thursday, after the company announced a 50% rise in EBITDA for Q1 2022 year-on-year, trading in line with management expectations and reflecting strong demand along with a schedule of price increases.
The company confirmed that it successfully passed on price increases to customers, including extra energy and freight surcharges.
Additional price increase are reportedly being implemented by the firm in a bid to offset continued cost growth.
RHI Magnesita issued a caveat that 3.5% of its revenues were based in the Commonwealth of Independent States (CIS) region, with the war in Ukraine putting the sector income at risk.
The group said it was in the process of implementing a slate of contingency measures, such as switching to alternative fuels to avoid energy supply disruption from Russian interference, and an additional capital expenditure of €6 million is set to be incurred to prepare for disruptions.
RHI Magnesita commented that its outlook estimated strong continued demand throughout its key markets over the early part of Q2 2022, underpinning confidence in the group’s outlook for the rest of the year.
The company added that further cost inflation in energy, freight, labour and purchased raw materials was being passed on to consumers in a “timely fashion.”
“In the first quarter we have successfully maintained the business momentum that we delivered in Q4 2021, with margins restored to acceptable levels as we realize the benefits of our price increase programme,” said RHI Magnesita CEO Stefan Borgas.
“Demand conditions continue to be positive, our order books remain full and we have good visibility into the second half. In the midst of ongoing volatility globally we are well positioned to benefit from cost savings in 2022 that will be delivered from our strategic investments in the optimization of our production network.”
“Further growth in new markets supported by acquisitions in Turkey and China and in our new recycling joint venture and new recycling technologies in Europe will also contribute.”