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 expanding high-value products and services.

• Completed the acquisition of Perry Metal Protection, integrating ahead of expectations and contributing positively to earnings and market leadership.

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

• Executed a $7 million cost-out program, managed inventory tightly, and implemented voluntary pay reductions and pay freezes for board and leadership.

• Significant operating leverage and high customer and employee engagement position the business for profit expansion as volumes recover.

Financial highlights

• Revenue declined 20% year-over-year to $385.4 million, with volumes down 12% to 101,716 tonnes.

• Normalized EBITDA was $2.1 million, down from $35.8 million in FY24; EBIT was $(26.0) million and net loss after tax was $(24.4) million.

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

• Operating cash flow was $10.4 million, and year-end inventory stood at $113.6 million, including $5.9 million from the new galvanizing business.

• No dividend declared for FY25 to preserve capital.

Outlook and guidance

• Activity and volumes are expected to improve through FY26 as economic headwinds ease, with manufacturing, agriculture, and infrastructure leading recovery.

• Margin recovery anticipated in the second half of FY26 as demand and capacity utilization improve.

• Commercial and infrastructure construction to benefit from government spending and lower interest rates.

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

• Board and CEO have volunteered a temporary 20% pay reduction and executive pay freeze.