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Highlights

  • In FY24, EBITDA declined by 39.5% YoY to NZD 31.4 million and NPAT fell by 84.7% YoY to NZD 2.6 million
  • FY24 full-year dividend declined by 25.2% YoY to 8.3 cents.
  • In first four months of FY25, revenue dropped by NZD 41.6 million YoY to NZD 141.7 million.

Steel & Tube Holdings Limited (NZX:STU), a leading New Zealand-based steel solutions provider, reported significant drop in NPAT and EBITDA in the financial year 2024 (FY24), reflecting the impact of an economic slowdown across New Zealand.

Financial Results Highlight

In FY24, STU recorded an EBITDA of NZD 31.4 million, a significant 39.5% decline from FY 2023's NZD 51.9 million. In FY 2024, NPAT plummeted to NZD 2.6 million, an 84.7% fall from FY 2023's NZD 17.0 million.

During the reported period, the company witnessed suppressed volumes amidst a recessionary environment, although the company’s cost-reduction programs mitigated some inflationary pressures. Despite the revenue decline, STU retained its market share, supported by elevated average selling prices.

STU reported an improved gross margin of 21.7% in FY 2024, compared to 21.1% in the previous fiscal year. Additionally, the company’s current ratio strengthened in FY24 to 3.50x (up from 3.24x in FY 2023).

FY 2024 Dividend

On the back of performance in FY 2024, the company’s full year gross dividend declined by 25.2% YoY to 8.3 cents and dividend yield decreased by 2% YoY to 9.7%. Strategic Focus for FY 2025

Looking ahead, Steel & Tube Holdings plans to focus on

  • Prioritizing revenue growth and profitability
  • Expanding offerings and cross-selling opportunities with existing clients.
  • Tight management of inventory to maintain scalability.
  • Strengthening margins through a focus on high-value products and services.

The company is committed to navigating current economic uncertainties while maintaining operational resilience.

Recent financial performance update

In the first four months of FY25, STU’s revenue dropped by NZD 41.6 million (YoY) to NZD 141.7 million and normalised EBIT fell to a loss of NZD 5 million. The performance was driven by weakness in the New Zealand economic conditions observed in second half of FY 2024 which has impacted sales volume significantly. Furthermore, other industry participants have highlighted that the demand for steel has declined considerably, hitting recent lows.

Share performance of STU

STU shares closed at NZD 0.82 per share on 27 December 2024. In the past one year, the share price of STU has dropped by almost 23.26% and in three months, it has declined by 15.46%.

52-week high of KMD is NZD 1.19, recorded on 7 February 2024 and 52-week low is AUD 0.80, recorded on 23 December 2024.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is December 27, 2024. The reference data in this report has been partly sourced from EODHD/Others.