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Low steel prices drag on Steel & Tube earnings-The 17th China(Guangzhou)Int'l Stainless Steel Industry Exhibition
2/19/2016 Stainless Steel Industry expo |
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New Zealand media reported that Steel & Tube Holdings lifted first-half profit 47%, although without income from property sales, their earnings fell as the price of steel continued to decline, fuelling intense competition.
Net profit rose to $15.9 million, or 17.8c per share, from $10.8 million, or 12.4c, in the six months ended December, but that included a $6 million gain from the sale of its former processing facility on Bowden Road in Auckland''s Mt Wellington. Underlying profit was $9.9 million, down 8.3% on 2014, on a 2.9% rise in revenue to $265.7 million.
Chief executive Mr Dave Taylor said ¡°While we remain in a challenging global steel environment, there are indications the drop in steel prices may be slowing. When coupled with a reasonably robust domestic economy, I''m optimistic that we''ll see a stronger performance from the business in the second half of the year, such that the underlying performance will be comparable with 2015."
Mr Taylor says global steel prices have reached lows not seen since 2003, which has created an intensely competitive domestic steel market.
Along with upgrading its processing facility, the steel products maker has been on an acquisition drive in recent times, buying Aquaduct NZ out of receivership for about $8 million cash in August last year, a month after it agreed to acquire fastener maker Manufacturing Suppliers for $32 million in cash and scrip. It also acquired Tata Steel (Australasia) for $28.1 million, renaming it S&T Stainless, in April 2014.
-The 17th China(Guangzhou)Int''l Stainless
Steel Industry Exhibition
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