Steel & Tube Holdings Limited Analysis

Overview

Steel & Tube was formed in 1953 and listed in 1967. It is now one of New Zealand's leading providers of steel solutions, allowing access to the widest range of steel products in the market, through its nationwide network of distribution centres. The company distributes and processes a range of steel products and operates through two divisions - Distribution and Infrastructure - and offers an end to end customer experience, advising, sourcing and supplying customers with their steel requirements.

The acquisition of complementary businesses over the years has led to Steel & Tube owning a portfolio of strong heritage brands. The company is focused on delivering quality service and products, safely to customers.

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Today, Steel & Tube operates in the New Zealand market, primarily in the construction, manufacturing and rural sectors.

Performance

The following information was extracted from Steel & Tube Holdings Limited's Half year Results, released on 24 February 2025

Steel & Tube Holdings Limited (NZX: STU), has announced its results for the six months ended 31 December 2024, as it continues to steadily navigate a weak economy and position itself for a return in demand. A relentless focus on customer service, cost management and efficiencies has improved the company’s resilience.

Chief executive, Mark Malpass, said: “Steel & Tube is a cyclical business and our 1H25 results are reflective of the recessionary environment. Demand for steel remains at the lowest levels since the 1990s. Our team continues to deliver excellent service to our customers with a focus on maintaining market share.”

Revenue of $196.0m was reflective of weaker customer demand across all sectors and products. Competitor pricing pressure has flowed through to margins. Gross margin $/tonne remains a continued focus through customer value add, cross selling, pricing discipline and cost control, as well as a strategic focus on higher value products and services. Normalised earnings were down year on year, with Normalised EBITDA of $2.0m and Normalised EBIT of $(9.5)m. The company reported a net loss after tax of $(10.4)m

1H25 Financial Performance

$m / 1H25 / 2H24 / 1H24

• Revenue / 196.0 / 217.4 / 261.8
• Volume (Ktonnes) / 48.7 / 53.0 / 62.6
• EBITDA / 0.6 / 10.2 / 21.2
• Normalised EBITDA* / 2.0 / 13.9 / 21.9
• EBIT / (10.9) / (0.6) / 10.2
• Normalised EBIT* / (9.5) / 3.2 / 11.3
• NPAT / (10.4) / (2.7) / 5.3
• Net operating cashflow / 23.1 / 3.5 / 38.7
• Dividends (cents per share) / - / 2.0 / 4.0