Global economic uncertainty prevails for listed Steel &
Tube, which begins a new era following major restructuring, a
majority-shareholder $91 million share sell-off and re-entry
to the New Zealand Stock Exchange's Top 50 list.
At Steel & Tube's annual meeting in Wellington yesterday,
chairman Sir John Anderson outlined how it still remained
difficult to form a clear view of the trading landscape "even
over the short-to-medium term".
The sovereign-debt issues in Europe were continuing and in
part contributing to the decline in China economic activity,
which was reducing commodity prices in the Australian
resources sector, Sir John told the annual meeting.
Craigs Investment partner-broker Peter McIntyre said while
sales were up and the company had a strong balance sheet and
cash, the outlook relied heavily on issues in Europe and
"Christchurch is not yet the windfall expected and [in all
regions] outside Auckland, things are still tough," Mr
Australian-based Arrium, formally trading as OneSteel, sold
its 50.3% majority shareholding in Steel & Tube on
October 9 for $91 million.
This sale subsequently allowed Steel & Tube to re-enter
the stock exchange Top 50 list last week.
Sir John said demand across all key sectors remained
"subdued" and the momentum of the expected Christchurch
rebuild was improving but continuing to experience delays.
Steel demand was being restricted to levels "marginally
above" the previous year, leading to an intensely competitive
While it was pleasing that in the previous financial year,
sales had increased 5% to $405 million, profitability was
down 23% at $13.1 million, primarily due to increased
industry competitiveness, he said.