RHI Magnesita NV on Wednesday said it was trading in line with expectations, but demand varied by region, as it maintained earnings guidance for the year.
For the three months ended September 30, the Vienna-based supplier of refractory products said reduced steel demand in Europe, caused by the temporary idling of steel mills, had been offset by demand in India.
In the US, steel production volumes fell by 4% in the year to date, as did production in South America.
Meanwhile, in China and East Asia, the group performed relatively better compared to overall volume decline in the region.
In India and West Asia, it benefited from an ongoing growth trend, with year-to-date steel production increasing by 7% from a year prior.
Refractory margins increased, supported by ongoing price increases on finished goods, but margin contribution from raw material assets is expected to be constrained throughout the second half due to foreign exchange rates and higher energy and freight costs.
In other news, RHS Magnesita said its European projects for strategic production optimisation were complete, pending the installation and integration of the manufacturing execution system at Radenthein in Austria.
In Brazil, however, projects at Brumado and Contagem were postponed, following supply-chain delays, cost inflation, contractor availability issues, and changes to foreign exchange rates and freight costs.
During the quarter, RHI Magnesita also completed its acquisition of an 87% stake in Sormas Sogut Refractory Materials Inc for €46 million.
Sormas is a producer of refractories for the cement, steel, glass and other industries in Turkey. RHI Magnesita said the acquisition significantly expanded its portfolio in the region.
The group has also agreed to buy Hi-Tech Chemicals Ltd, a flow control refractory business, for €77.5 million in cash through its subsidiary RHI Magnesita India Ltd.
Looking ahead, RHI Magnesita said that, following the major investments it had made in the optimisation and regionalisation of its production network since 2019, it expected to meet its own expectations for earnings before interest, tax and amortisation in the full financial year.
RHI Magnesita shares were trading 4.0% higher at 1,684.00 pence each in London on Wednesday morning.
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