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<ul><li>Steel and Tube's (STU) trading update highlighted that, as expected, operating conditions remain challenging in 1H24.</li><li>While volumes remain under pressure, solid pricing discipline and cost management has seen STU guide to 1H24 EBIT being broadly flat on 2H23.</li><li>Forward indicators are improving and we continue to expect some pick-up in 2H24, but there is a risk that this will be slower to translate into activity than expected. </li></ul>

Steel and Tube's (STU) trading update highlighted that, as expected, operating conditions remain challenging in 1H24.While volumes remain under pressure, solid pricing discipline and cost management has seen STU guide to 1H24 EBIT being broadly flat on 2H23.Forward indicators are improving and we continue to expect some pick-up in 2H24, but there is a risk that this will be slower to translate into activity than expected. 

Steel & Tube Holdings - The Cycle Grinds On

New Zealand Professional Investment Services Firm, Forsyth Barr

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<ul><li>Steel and Tube's (STU) FY23 result was in line with recent guidance and our expectations. It was a tale of two halves and two divisions.</li><li>Volume declines accelerated significantly in the second half.</li><li>This was most acutely felt in the Distribution division while structural improvement in Infrastructure saw earnings lift. </li></ul>

Steel and Tube's (STU) FY23 result was in line with recent guidance and our expectations. It was a tale of two halves and two divisions.Volume declines accelerated significantly in the second half.This was most acutely felt in the Distribution division while structural improvement in Infrastructure saw earnings lift. 

Steel & Tube Holdings - FY23 Result — Tale of Two Halves

<ul><li>Macro challenges offset through cost controls: STU upgraded its EBIT guidance by +5% at the midpoint to NZ$31m–32m.</li><li>Inventory unwinding drives debt reduction: STU's focus on its balance sheet and running down inventory has reduced net debt by c.-NZ$50m on FY22 and resulted in net cash of NZ$6.5m at FY23. </li><li>More cyclical pressures on the horizon: FY24 is likely to be another challenging year. While STU's key non-residential exposure remains robust we expect some deterioration as higher interest rates pressure commercial development feasibilities. </li></ul>

Macro challenges offset through cost controls: STU upgraded its EBIT guidance by +5% at the midpoint to NZ$31m–32m.Inventory unwinding drives debt reduction: STU's focus on its balance sheet and running down inventory has reduced net debt by c.-NZ$50m on FY22 and resulted in net cash of NZ$6.5m at FY23. More cyclical pressures on the horizon: FY24 is likely to be another challenging year. While STU's key non-residential exposure remains robust we expect some deterioration as higher interest rates pressure commercial development feasibilities. 

Steel & Tube Holdings: Steeling the Limelight

<ul><li>Slow start to 2H23, stronger finish required to hit guidance: STU guided to FY23 EBIT of NZ$28m–$32m which implies 2H23 EBIT of NZ$8m–$12m</li><li>Solid cash earnings runs down inventory and net debt: The key positive from the update was further evidence that STU's focus on its balance sheet is paying off, with inventory and net debt continuing to reduce</li><li>Navigating  a weaker demand environment: FY24 is likely to be another challenging year given the exit run-rates from FY23</li></ul>

Slow start to 2H23, stronger finish required to hit guidance: STU guided to FY23 EBIT of NZ$28m–$32m which implies 2H23 EBIT of NZ$8m–$12mSolid cash earnings runs down inventory and net debt: The key positive from the update was further evidence that STU's focus on its balance sheet is paying off, with inventory and net debt continuing to reduceNavigating  a weaker demand environment: FY24 is likely to be another challenging year given the exit run-rates from FY23

<ul><li>Steel and Tube (STU) has provided FY23 normalised EBIT guidance NZ$28-32m and 2H23 volumes down -10-15% on 1H23.</li><li>There has been a broad based softening in demand and high cost inventory is impacting margins.</li><li>EBIT guidance is 24-32% below our current forecast of NZ$42m and implies 2H23 EBIT of NZ$8-12m (NZ$20m 1H23).</li></ul>

Steel and Tube (STU) has provided FY23 normalised EBIT guidance NZ$28-32m and 2H23 volumes down -10-15% on 1H23.There has been a broad based softening in demand and high cost inventory is impacting margins.EBIT guidance is 24-32% below our current forecast of NZ$42m and implies 2H23 EBIT of NZ$8-12m (NZ$20m 1H23).

Steel and Tube (STU): Trading Update and Earnings Guidance

New Zealand

Steel & Tube Holdings Limited produces and distributes steel throughout New Zealand and its products include steel fasteners, nuts, bolts and screws.  The Company's other activities include steel reinforcing.

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Steel & Tube Holdings (STU NZ)

Steel & Tube Holdings - The Cycle Grinds On

While volumes remain under pressure, solid pricing discipline and cost management has seen STU guide to 1H24 EBIT being broadly flat on 2H23.

Water Tower Research

Steel & Tube Holdings - FY23 Result — Tale of Two Halves

Steel and Tube's (STU) FY23 result was in line with recent guidance and our expectations. It was a tale of two halves and two divisions.

Forsyth Barr

Steel & Tube Holdings: Steeling the Limelight

Steel and Tube (STU) lifted its FY23 earnings guidance slightly as cost-out initiatives and stable gross margin dollars per tonne offset softer...

Forsyth Barr

Steel & Tube Holdings: Down the Tubes

Steel and Tube (STU) has provided FY23 EBIT guidance which implies a significant slowdown in 2H23 earnings, driven by both lower volumes and gross...

Forsyth Barr

Steel and Tube (STU): Trading Update and Earnings Guidance

Steel and Tube (STU) has provided FY23 normalised EBIT guidance NZ$28-32m and 2H23 volumes down -10-15% on 1H23; There has been a broad based...

Forsyth Barr

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