Purchase boosts Steel & Tube profit
The acquisition of the Australasian division of one of the world's largest steel producers has built up Steel & Tube's profit to $17.9 million.
The Wellington-based listed construction materials supplier announced today its net profit for the year to June 30 was up 14.7 per cent.
This included a 12.2 per cent increase in the company's revenue, to $441.4m, including $12.9m from its new Stainless business.
Steel & Tube bought Tata Steel International Australasia (TSIAL) for $27.5m in April this year, and has since rebranded it to be called S & T Stainless.
TSIAL supplied stainless steel, engineering steel and composite floor decks in New Zealand and Pacific Island markets.
Steel & Tube was currently building two new facilities in Auckland, which it said would further enhance processing capability and efficiency.
A purpose-built facility in Palmerston North was also due to begin operating in the final quarter of this year.
Chief executive Dave Taylor said economic activity had improved across most sectors, improving volumes, but intense competition was restraining margins.
The steel industry remained challenged globally, he said, because of over-capacity and increasing geopolitical risks and reduced economic forecasts across several regions.
But domestically, the company welcomed the Government's commitment to infrastructure projects.
It was involved with Auckland's Waterview Connection, Wellington's National War Memorial Park and underpass and Burwood Hospital in Christchurch.
"We expect that the economic activity levels across the sectors we serve will continue to increase and the S&T business will continue to deliver improving results," Taylor said.
The company announced a final dividend of 9 cents a share.