Source: Radio New Zealand
RNZ / Nate McKinnon
Steel manufacturer and distributor Steel and Tube has posted another bottom-line loss, but says it’s seeing signs of light at the end of the tunnel.
Key numbers for the 6 months ended December compared with a year ago:
- Net loss $12.4m vs net loss $14.0m
- Revenue $211.9m vs $196m
- Operating earnings $1.2m vs $0.6m
- Product margin 31.1% vs 28.7%
- No dividend
Chief executive Mark Malpass said trading had been lumpy but the edge of a tough marketplace had been taken off by its purchase of a business last year.
“The acquisition of galvanising business Perry Metal Protection – a measured and strategic buy at the bottom of the cycle – has done exactly what we wanted: providing consistent high value earnings.”
He said the core steel business continued to struggle amid the stop-start nature of the recovery, and tighter margins as competitors fought for market share.
Malpass said Steel and Tube was a cyclical business and the broader economy was showing improvement.
“We are starting to see some positive signs – manufacturing demand is on the rise, Fast-Track projects will support the near term infrastructure pipeline, and the rollover of fixed mortgages to lower interest rates and easier access to credit will help to stimulate construction,” he said.
Steel and Tube has been trimming expenses, cutting $3 million in costs over the past year, and said it was focused on holding market share and keeping debt down.
Malpass believed the company was well-placed to benefit as conditions continued to improve.
“As a cyclical business, Steel and Tube is positioned for the upside, with significant operating leverage, a strong market position, a high-quality team, and a broad product and service offer that has been further enhanced by recent acquisitions.”
The company did not give any forecast but expected trading to keep improving in the second half.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand