Revenue for Steel & Tube's (STU) six months to December rose $7.5 million to $266 million, while after-tax profit was $15.9 million, including a one-off $6 million property gain.
Underlying profit was therefore $9.9 million, which was down 8.3% on last year's half-year $10.83 million profit.
STU's chief executive, Dave Taylor, said global steel prices had now fallen by 30%, reaching lows not seen since 2003.
"This has created an intensely competitive domestic steel environment, yet it's pleasing to see our company initiatives almost fully compensate for the impact of this decline,'' he said.
An interim dividend of 9c was declared. STU shares were up more than 8%, to $2.20, after the disclosure.
Forsyth Barr broker Suzanne Kinnaird said it was a "disappointing result'', with ebit (earnings before interest and tax) down 6%, despite two acquisitions early in the six-month trading period.
"Margins continue to be squeezed by a combination of intense import and domestic competition for market share, and declining raw material prices that are constraining price increases,'' she said.
Without the $6 million property sale, normalised basis profit was down 12%.
STU's guidance implied underlying full-year Ebit around $333.3 million, against Forsyth Barr's expectations of $34.1 million.
While there was some negative risk, Mrs Kinnaird did not expect to make any wholesale forecast changes.
Mr Taylor said STU's half-year results were boosted by ongoing operational and productivity improvements, combined with earnings from the acquisition of MSL and Aquaduct and Bosch Irrigation.
Fastener specialist MSL was purchased for $26 million plus $6 million script and produced $15.9 million revenue, contributing $1.8 million in after-tax profit, while pipe and farm irrigation company Aquaduct and Bosch Irrigation was purchased for $8 million.
"However, these gains were offset by the continuing decline in steel prices,'' Mr Taylor said.
Several key milestones were achieved alongside acquisitions of MSL and Aquaduct and Bosch Irrigation, including commissioning of a Auckland reinforcing and wire processing facility and a new coil and purlins processing facility, also in Auckland.
Domestically, demand for steel and steel-related products remained "moderate'', while demand from the construction and related sectors continued to strengthen.
Mr Taylor said while the company was still in a "challenging global steel environment'', there were indications the declining price "may be slowing''.
"I'm optimistic that we'll see a stronger performance from the business in the second half of the year, such that the underlying performance will be comparable with 2015,'' he said.
