Vulcan Steel (VSL) H1 2025 earnings summary

Executive summary

• Operating cash flow reached NZD 81 million in 1H FY25, with NZD 34 million used to reduce debt and a 10% return on capital employed despite challenging economic conditions.

• Revenue declined 12.6% year-on-year to NZD 493 million, with EBITDA down 30.5% and NPAT down 64.8% to NZD 9 million.

• Maintained high service levels and grew non-aluminum customer base by 8% over two years, with 22,500 clients and top 20 clients accounting for 9% of revenue.

• Integration of aluminum business and rollout of hybrid sites continued, with 13–18 sites implemented and further expansion planned.

• Net debt reduced to NZD 241.5–242 million since June 2024, supported by disciplined working capital management.

Financial highlights

• Revenue: NZD 493 million (-12.6% YoY); sales volume: 109,217 tonnes (-8.3% YoY); gross margin: 35.2% (-0.2pp YoY); gross profit per tonne down 5.3%.

• EBITDA: NZD 56.9–57 million (-30.5% YoY); EBIT: NZD 32 million (-45.8% YoY); NPAT: NZD 9–9.2 million (-64.8% YoY); EPS: 7.0c (-64.9% YoY).

• Operating cash flow: NZD 80.7–81 million (-23.4% YoY); adjusted cash conversion: 60%.

• Interim dividend: 2.5c per share (fully franked/imputed); annual Capex guidance at NZD 25–30 million.

• Return on capital employed: 10–10.3% (rolling 12 months).

Outlook and guidance

• Early signs of recovery in New Zealand, with volume improvement expected from Q2 or Q3 2025; Australian Metals segment steady, but Victoria remains weak.

• Commercial construction and rural/export segments showing improvement; seasonality to impact 2H earnings due to fewer working days.

• Dividend payout policy revised to 40–80% of NPAT, targeting 40–60% for FY25.