The building boom and rising prices and margins have delivered a tripling of Steel and Tube's half year profit.
Steel & Tube has increased stocks of high demand products to ensure they are available for customers, its CEO says. Photo: Steel & Tube / Lindsay Keats
Key numbers (six months to December 2021 vs year ago)
- Net profit $14.3m vs $4.1m
- Revenue $282.2m vs $226.3m
- Operating earnings $31.9m vs $17m
- Dividends 5.5 cents vs 1.2c
The building products company said it had concentrated on ensuring products were available as it coped with global steel mill and supply chain constraints, higher prices and Covid-19 restrictions.
Chief executive Mark Malpass said the restructuring of the business in recent years had lowered the company's cost base and improved its margins, with the main internal cost rises coming from wages and salaries.
"We have been disciplined in our focus on customers and product mix, targeting products and sectors that have allowed us to improve our overall margins.
"Supply dynamics have been tight. Steel mill customers continue to be on allocations, lead times have increased both locally and offshore, and there have been significant cost price escalations."
Malpass said Steel & Tube had increased stocks of high demand products to ensure they were available, and the strong demand for steel was expected to continue, given increased construction of houses, commercial buildings and infrastructure projects.
"No significant change in sector headwinds - supply chain, labour, supplier costs - is anticipated in the next six months."
He said the company was expecting an escalation and greater disruption from Omicron, and it has implemented a vaccination mandate for its workforce.
The focus for the second half of the financial year would be to improve its margins, increase its pipeline of contracted work, bed in new processing equipment and look for new product opportunities.