Photo: RNZ / Nate McKinnon
Building products firm Steel and Tube is expecting a big hit to earnings and profits as a slowing economy and rising costs eat into its margins.
The company said revenue for the 10 months ended April was slightly ahead of last year at $489 million, but its profit for the same period was $12.4m compared with $24.1m.
"The company continues to perform well against a backdrop of tightening economic conditions and weather events over the past 10 months. Revenues have continued to grow driven by elevated international pricing. Higher input prices and cost pressures have impacted margins," chief executive Mark Malpass said.
The company now expected full-year normalised operating earnings of between $48m and $52m, compared with $66.9m in 2022.
Steel and Tube had a strong rebound after Covid-19 restrictions were lifted and building work surged, but Malpass said the operating environment was now "recessionary", with volumes in the second half expected to be 10 to 15 percent below the first half of the year.
He said the company had strengthened its core business, cut costs and inventory, as would focus on providing higher value products and services.
"The company has a healthy pipeline of work in place across a diverse range of industries."
Malpass said steel was an essential material and would be in demand in the rebuild after the recent floods and cyclone.