Steel & Tube (STU) H2 2026 earnings summary

Executive summary

• Achieved positive normalized earnings in March and breakeven in May, with year-over-year improvement in normalized results, despite ongoing recessionary conditions, market disruptions, and rising costs delaying full profitability return.

• Revenue increased 13.9% to $438.9m and volumes rose 15.9% to 115.3 Ktonnes year-over-year, with second half earnings up 40% over the first half and positive trends until Q4 slowdown.

• Statutory net loss after tax was $(61.2)m, including a $51.9m impairment and $3.8m in other non-trading adjustments.

• Portfolio review led to planned exit from reinforcing, wire, and plate processing operations, and closure of up to nine sites to simplify the business and improve returns.

• Strategic execution and cost discipline initiatives are underway to drive higher value growth, margin expansion, and sector diversification.

Financial highlights

• Normalized EBIT improved 23.7% year-over-year to $(16.5)m; normalized EBITDA surged 376% to $9.9m.

• Operating cash flow improved 22.1% to $12.7m; year-end inventory at $111.0m, with SKUs reduced from 23,000 to ~13,000.

• Net debt at 30 June 2026 was $48.0m, mainly due to the Perry's acquisition.

• Product margin percentage up 2.6pp to 30.7%, with margin per tonne rising to $1,167.

• Cost out programme delivered $3.5m in FY26 savings, with $6m annualised savings expected.

Outlook and guidance

• Gradual and uneven recovery expected, with export and manufacturing sectors showing resilience and infrastructure work continuing, but commercial construction likely to lag.

• Second half of FY 2027 expected to show improvement in macro volumes; first half to remain variable.

• Strategy focuses on cost discipline, margin growth, capital allocation to high-value opportunities, and strengthening the balance sheet.

• Highly leveraged to domestic market recovery, but timing and pace remain uncertain.

• Portfolio review actions and cost discipline initiatives to continue.