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Steel & Tube profit slumps 33 per cent

NZ Newswire logoNZ Newswire 16/02/2017 Rebecca Howard

NZX-listed steel products distributor Steel & Tube Holdings has reported a 33 per cent drop in first-half profit, hurt by a decline in non-residential construction, but it 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 $15.9m in the same period a year earlier.

"This is against a volatile global steel and intensely competitive domestic trading landscape," said chief executive Dave Taylor.

He noted that while residential construction activity improved, non-residential construction by floor area dropped by 20 per cent in the year to December, contributing to domestic steel volumes remaining some 13 per cent to 15 per cent below the peaks experienced in 2004/05.

Revenue from ordinary activities fell 4 per cent to $254.5m while profit before tax was $14.6m, down 27 per cent on the prior period.

The company said it would pay an interim dividend of 9 cents per share, unchanged from the same period a year earlier.

Mr Taylor said he expected 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 per cent over the past year.

The company also announced that John Anderson, chairman since 2012, would retire.

Susan Paterson, who joined the board last month, would replace him, effective immediately.

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