Vesuvius (LSE:VSVS), the global molten metal flow engineering group, said operational challenges in its Steel division offset positive pricing and cost reductions in the six months to 30 June.
The Advanced Refractories unit performed significantly lower than anticipated due to operational problems in North America and India and a tough pricing environment in EMEA, while Flow Control improved trading profit and return on sales despite similar disruption.
Steel production outside China, Iran, Russia and Ukraine grew 3.8% versus the first half of 2025, and Chinese net steel exports fell 5.3% over the same period.
The Foundry division delivered a significant improvement in revenue and trading profit, driven by the re-establishment of net positive pricing, structural cost cuts, market share gains and the MMS acquisition, even as European and South American markets stayed subdued.
The group delivered £7.4m of structural cost reductions in the first half, ahead of schedule, and improved its working capital intensity to 23.1% from 23.6% at the 2025 year-end, with leverage easing to 1.9 times net debt to EBITDA from 2.0 times.
Vesuvius declared an interim dividend of 7.1p per share, flat versus 2025.
"We remain strongly focused on cash management and deleveraging, with working capital intensity improving," chief executive Patrick André said, adding that the Steel division's operational issues are expected to be resolved by the end of the year.
The company said it expects full-year trading profit slightly ahead of 2025 on a constant currency basis.
News Intelligence what this means for the company
Vesuvius reported first-half operational disruption in its Steel division—specifically Advanced Refractories in North America, India, and EMEA—that offset gains from pricing and cost control elsewhere. Despite this, the company guided for full-year trading profit slightly ahead of 2025 on a constant currency basis, with Foundry division performing significantly better and the group delivering £7.4m of structural cost cuts ahead of schedule. The interim dividend held flat at 7.1p, and leverage improved to 1.9x net debt to EBITDA from 2.0x, signalling disciplined capital allocation amid operational headwinds.
The guidance for full-year profit ahead of 2025 despite first-half Steel division setbacks suggests management expects operational issues to resolve by year-end, but the flat dividend and focus on deleveraging indicate caution about near-term cash generation. Foundry's turnaround and structural cost delivery are bright spots, though EMEA and South American market weakness persists.
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