Steel & Tube raises half year profit

Rebuilding after the Christchurch earthquake would offer some upside, but indications were that although the final cost of reconstruction activity may be higher than initial estimates, the duration would be longer. Photo / Mark Mitchell

Steel & Tube Holdings lifted half year net profit 165 per cent or $5.2 million to $8.4 million, with revenue similar to a year earlier at $190.5 million.

In the six months to the end of December, volumes rose 6 per cent amid a slowly improving economy, the company said yesterday.

Strong competition continued and despite higher prices than the previous six months, prices were still below those of the same period last year.

"Most market sectors saw marginal improvements through a period of significant volatility from month on month with October particularly slow."

A fully imputed interim dividend of 6c per share is to be paid.

Steel & Tube said it expected second-half-year results would be similar to those of the first six months.

A gradual improvement in activity was likely for most sectors, except commercial construction where further short-term contraction was predicted, the company said.

So far the economic recovery had been slower than expected, mainly due to lower household spending as consumers remained cautious.

From its perspective, both the residential and non-residential sectors, with the exception of infrastructure, remained soft and any improvements would be from low bases, Steel & Tube said.

Rebuilding after the Christchurch earthquake would offer some upside, but indications were that although the final cost of reconstruction activity may be higher than initial estimates, the duration would be longer.

The company had implemented a new operating model focused on the strengths of its product range and geographic coverage.

Facility rationalisation continued with a further seven business operations consolidated into existing facilities.

Steel & Tube's share price closed up 12c to $2.39 yesterday.

- NZPA