Nick Calavrias says conditions could brighten next year. Photo / Mark Mitchell
Engineering and contracting company Steel & Tube said yesterday the strong New Zealand dollar and high interest rates contributed to a 9 per cent decline in net annual profit to $27.8 million.
Trading was expected to remain tough, although conditions could brighten in the next calendar year as
increased earnings from dairy farming flowed through the economy, Steel & Tube chief executive Nick Calavrias said.
For the year to June, revenue was up 6 per cent at $466.3 million. The result included a full year's contribution from NZF Stainless, compared with three months' contribution the previous year.
Sales were little changed, allowing for the effect of the acquisition.
"Although the result did not match last year's, the company performed well considering the volatile market conditions it had to contend with," Calavrias said.
"The impact of the strong NZ dollar and high interest rates ... adversely affected the key industries serviced by the company."
Total construction activity increased on the back of residential housing demand, but the value of commercial construction, a key driver for the business, was steady. The distribution business produced higher earnings, while the manufacturing business underperformed.
The result represented an after-tax return on average shareholders' funds of 20 per cent.
The company declared a final dividend of 14c per share, payable on September 28. A supplementary dividend of 2.47cps will be paid to non-resident shareholders.
Steel & Tube shares closed down 20c, or 4.3 per cent, at $4.50 yesterday.
- NZPA
