KEY POINTS:
Steel & Tube Holdings is expecting an improved result for the current financial year, although its second half could be one of the most difficult it has faced.
Chief executive Nick Calavrias told shareholders at the company's annual meeting in Wellington that it expected market conditions to gradually improve in early to mid-2009 as the weaker New Zealand currency assists exporters, and lower interest rates and tax cuts flow through the domestic economy.
The country's largest distributor of steel products has been hit hard by skyrocketing steel prices and increased competition from cheap imports. The company - the subject of a takeover bid by Australian steelmaker OneSteelwhich was later withdrawn - saw net profit after tax for the year ending June 30 plunge 19 per cent to $22.5 million.
Calavrias, however, expects an improved result for the 2008/09 financial year as world steel demand, and prices, softened. First-half trading was expected to be substantially ahead of the same period last year, he said.
While residential housing construction activity would continue to decline in the near term, said Calavrias, the sector was likely to improve from mid to early 2009 due to lower interest rates and an increase in infrastructure projects and commercial activity around the 2011 Rugby World Cup.
Chairman Dean Pritchard said both demand and pricing had been affected by the global slowdown.
* Chief executive Nick Calavrias will step down in 2009 after 17 years at the helm.
