Steel & Tube (STU) H2 2025 earnings summary

Executive summary

• Navigated a challenging economic period with disciplined execution of growth strategy, focusing on strengthening core operations, customer service, and operational efficiency.

• Completed and integrated the Perry Metal Protection acquisition ahead of expectations, enhancing market leadership and providing resilience through less cyclical revenue streams.

• Maintained positive normalized EBITDA and operating cash flows despite significant declines in volumes and revenue.

• Executed a $7 million cost-out program and managed inventory tightly to preserve financial strength.

• Board and leadership took voluntary pay reductions and pay freezes to align with broader cost-saving measures.

Financial highlights

• Reported a net loss of $24.4 million, including $4.6 million in non-trading costs, with revenue down 20% year-over-year to $385.4 million and volumes down 12% to 101,716 tonnes.

• Normalized EBITDA remained positive at $2.1 million, though down from $35.8 million prior year; normalised EBIT at -$21.4 million.

• Inventory at year-end was $113.6 million, including $5.7 million from the new galvanizing business and 13% related to growth investments.

• No dividend declared for FY25 to preserve capital.

• Gross margin percentage decreased to 28.1% from 29.8% year-over-year.

Outlook and guidance

• Expecting modest improvements in activity over the next 12–18 months, with manufacturing and agriculture leading recovery and economic headwinds easing in FY26.

• Infrastructure activity to increase due to government investment; commercial and residential sectors to follow as funding conditions improve.

• Anticipate headwinds to persist until early 2026, with margin recovery expected in the second half of FY26.

• CapEx to remain below depreciation levels, with continued focus on strategic investments and digital technology.

• Continued focus on cost discipline, inventory control, and capital allocation for growth.