Steel and Tube slumps

WELLINGTON - Steel and Tube Holdings reported a 72 per cent dive in after-tax earnings and slashed dividend payout following trading losses in engineering and the cost of exiting that business.

Group bottom line profit fell to $3.36 million for the year to May, from $11.94 million 12 months earlier, on sales 14 per cent lower at $337.9 million, from $395.2 million previously.

The directors have declared a 4c fully imputed final dividend, leaving the total payout for the year at 8c, compared with 14c in 1997-98.

"Despite the difficult trading conditions in both New Zealand and British Columbia, the company was able to maintain market shares and generate strong cashflows," chairman Robert Every said.

"With the disposal of the engineering business, the group has refocused on core activities enhanced by the recent acquisition of BHP-Steel Building products, a major distributor of steel roofing and cladding products throughout New Zealand."

Trading losses and close out costs associated with the engineering business, as foreshadowed in March, amounted to $6.61 million after tax.

Segmental reports showed annual operating profit from New Zealand processing, fabrication and distribution of steel products fell to $17 million for the year, from $23.18 million previously, on sales down at $218.5 million, from $242.9 million.

In Canada, the profit from this activity fell to $2.88 million ($6.57 million), on sales of $86.9 million ($102.1 million).

The discontinued engineering business in New Zealand showed a loss of $8.65 million (loss $2.74 million) on sales of $32.5 million ($50.3 million).

Overall operating profit was down at $11.22 million ($27.01 million). - NZPA