Vesuvius expects flat profits as refractories business remains under pressure

(Sharecast News) - Molten metal engineering group Vesuvius said on Thursday that full-year profits are expected to be broadly flat on a constant-currency basis, as improving performances in two of its divisions were offset by continued challenges in its Advanced Refractories business.

The company expects trading profit for 2026 to be broadly in line with the £147.2m recorded last year when adjusted for current exchange rates, compared with the previously reported figure of £151.1m.

In a trading update covering the third quarter, Vesuvius said year-to-date revenues and trading profits in its Flow Control and Foundry divisions were ahead of the corresponding period in 2025.

Flow Control benefited from higher pricing and cost savings, which more than compensated for lower volumes, while Foundry was supported by the integration of the MMS acquisition and underlying business growth.

However, profitability in Advanced Refractories continued to be affected by operational difficulties in North America and India, alongside challenging pricing conditions in Europe.

Vesuvius said operational problems at its North American facilities had now largely been addressed, with production backlogs substantially reduced and expected to be largely cleared by the end of the year. Manufacturing stability at its Vizag facility in India had also improved.

The company highlighted a 3.1% increase in steel production outside China, Ukraine, Russia and Iran during the first nine months of 2026, driven by stronger activity in North America, India and Southeast Asia.

Meanwhile, Vesuvius said it remained on track to achieve cost savings of at least £55m by 2028, including around £10m this year.

Working capital management continued to improve, while leverage remained broadly unchanged from the half-year position.

See latest RNS on Sharecast