After recovering to half-year & full-year profits in 2019, Steel & Tube Holdings Ltd reverted to loss in the 6 months to December.
The company gave warning of a $37 million loss on 24 January, and confirmed that outcome on Monday.
The result included $39.1 million in non-trading adjustments, $37.1 million of that from non-cash goodwill impairment and $2 million in restructuring & relocation costs. Excluding non-trading adjustments, the company achieved normalised ebit (earnings before interest & tax) of $5.7 million.
Chief executive Mark Malpass made these points:
- Adverse market conditions continued to impact on sales revenue & volumes
- The company has made progress in controllable areas, reducing operating costs despite a higher cost environment, managing margin and being disciplined with working capital
- Cashflow has remained robust despite the decrease in earnings, enabling a further reduction in net debt
- The company unconditionally agreed on 30 January (post-balance date) to sell a surplus Christchurch property for $5.8 million.
Steel & Tube expects its result to improve in the second half with benefits from cost efficiencies & reduced overhead, Project Strive initiatives and the start of significant new contracts.
The board has declared a fully imputed interim dividend of 1.5c/share.
28 August 2019: Market contraction offsets Steel & Tube turnaround gains
18 February 2019: Steel & Tube confirms turnaround from 2018 loss
12 September 2018: Steel & Tube completes books-clearing, future already brighter
7 August 2018: Updated: Steel & Tube seeks $80.9 million from placement & rights issue, updates guidance
Attribution: Steel & Tube.