Ann: FORECAST: STU: 2015 Annual Meeting - Media Release

• Release Date: 12/11/15 12:20
• Summary: FORECAST: STU: 2015 Annual Meeting - Media Release
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					STU
12/11/2015 12:20
FORECAST
PRICE SENSITIVE
REL: 1220 HRS Steel & Tube Holdings Limited

FORECAST: STU: 2015 Annual Meeting - Media Release

12 November 2015

Profits lift for New Zealand's biggest steel distributor

Steel & Tube, New Zealand's biggest steel distributor, posted sales of $502
million for the year ending June 2015, with after-tax profits up by 20% to
$21.4 million.

"It's been a significant year for S&T," CEO Dave Taylor told shareholders at
the Company's Annual Meeting. "We have focused our efforts on enhancing
efficiency and strengthening our core business."

S&T has recently opened three purpose-built facilities: two in Auckland (an
area that presents around one-third of domestic steel demand) at Savill Drive
and Highbrook, and one in Palmerston North. Their completion marks a key
milestone in S&T's extensive $30-million One Company reinvigoration
programme, putting it at the forefront of New Zealand's steel distribution
and processing sector.

In August and September the Company announced the acquisition of MSL,
distributors of Fortress Fasteners, and large bore polyethylene pipe
companies, Aquaduct and Bosch.

Board Chairman Sir John Anderson said the acquisitions will take S&T into new
and exciting territory as well as helping to off-set volatility in the
commercial steel market, and a moderating New Zealand economy.

During his speech to investors, Mr Taylor warned that increasing low-priced
steel exports and imported pre-fabricated steel was putting New Zealand's
steel industry under pressure, adding: "Finished steel prices are now at
their lowest level for almost 13 years.

"Chinese exports have increased by 38% in the year ending September 2015 and
will likely exceed 100 million tonnes this year. Putting this into
perspective, New Zealand's demand across all steel products is less than 1
million tonnes a year."

Mr Taylor pointed out that many jurisdictions have introduced anti-dumping
legislation to help protect their steel industries, increasing the focus on
those countries where such actions are not being pursued, such as New
Zealand. He cited the recent number of steel mill closures in the UK and the
activities of BlueScope in Australasia as examples of the impact that
low-priced exports is having on global steel manufacturing.

"What's not appreciated is that these lower steel prices have a significant
impact on distribution margins, too. With the decrease in steel prices over
the past three years, New Zealand's entire steel distribution profitability
is estimated to have reduced by $45 million compared to three years ago."

The issue, he said, had accelerated in the past 12 months, impacting the
second half of the 2015 fiscal year.

Looking towards this full-year's results, the profit impact will be off-set
by the acquisitions. Notwithstanding this, continuing global steel dynamics
mean the first half results are likely to be lower than December 2014.

[Ends]

For further information: Diane Robinson, Communications Manager, Steel &
Tube: 027 569 1919
End CA:00273346 For:STU    Type:FORECAST   Time:2015-11-12 12:20:40