Steel & Tube Holdings, the NZX-listed steel products distributor, reported a 33% drop in first-half profit, hurt by a decline in non-residential construction, but expects things to pick up in the second half.
The company said profit fell to $10.6 million in the six months ended December 31 from $15.9 million in the same period a year earlier.
"This is against a volatile global steel and intensely competitive domestic trading landscape," chief executive Dave Taylor said. He noted that while residential construction activity improved, non-residential construction by floor area dropped 20% in the year to December, contributing to domestic steel volumes remaining some 13-15% below the peaks experienced in 2004/05.
Revenue from ordinary activities fell 4% to $254.5 million while profit before tax was $14.6 million, down 27% on the prior period.
The company said it would pay an interim dividend of 9c a share on March 31, unchanged from the same period a year earlier.
Mr Taylor said profitability was impacted by $1.2 million after tax as S&T Plastics increased capabilities ahead of several contract commitments worth more than $27 million in calendar 2017. Its recent addition, Composite Floor Decks Ltd. had two strong trading months, he said.
He said he expects the second half of the year to be stronger than the first, reflecting the pricing opportunity. He also noted that contracts recently awarded to S&T Plastics, the benefits of cost reduction and CFDL performance through the next six months will deliver improved earnings.
The shares last traded at $2.62, and have gained 43% over the past year.
The company also announced that Sir John Anderson was retiring as board chairman. He was first appointed as a director in 2011 and became chairman in late 2012. Susan Paterson, who joined the board on January 16 will replace Anderson as chairman, effective immediately.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- AUT's Brian Cusack explains why the government has much more work to do on cyber-security
- Pie Funds' Mike Taylor on this week's highs and lows
- Cameron Officer on whether Tesla's first electric truck will be the first on the market
- Tim Hunter is disappointed Vista Group is resorting to a stock split
- NBR Radio: The best interviews, with Grant Walker – updated daily