RHI Magnesita annual profit falls despite revenue jump amid high costs

(Alliance News) - RHI Magnesita NV on Monday reported a lower profit in 2022, despite a surge in revenue, as costs increased.

The Vienna-based supplier of refractory products, such as bricks, lifted its annual payout, however.

The company said pretax profit in 2022 fell 6.4% to GBP270.5 million from GBP289.1 million in 2021, despite revenue growing 30% to GBP3.32 billion from GBP2.55 billion in 2021.

Its cost of sales rose by 30% to GBP2.55 billion from GBP1.97 billion. Further, net finance costs increased to GBP73.1 million from GBP24.9 million. General and administrative expenses grew 28% to GBP277.2 million from GBP217.4 million.

The company declared a dividend of EUR1.60 per share, up 6.7% from EUR1.50 a year ago.

Looking ahead, RHI Magnesita said volatility and uncertainty are expected to remain across all markets excluding India in 2023. It added that the outlook for revenue, earnings before interest, tax, depreciation and amortisation and Ebita for 2023 is broadly in line with current analyst consensus, with up to a 5% reduction in sales volumes and lower refractory pricing expected to lead to lower revenue.

It added: "Costs are expected to remain flat or increase as higher energy and labour costs offset lower sea freight and purchased raw materials."

This will result in a group Ebita margin of around 10% in 2023, down from 11.6% in 2022.

Chief Executive Officer Stefan Borgas said that the company is able to face the challenges "in a much stronger position" due to strategic cost savings and sales strategies over the past four years.

RHI Magnesita shares were 0.6% lower at 2,638.00 pence each in London on Monday morning.

By Tom Budszus, Alliance News reporter

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