Steel & Tube Holdings Ltd (NZSE:STU) (Q1 2026) Earnings Call Highlights: Navigating ...

This article first appeared on GuruFocus .

• Revenue Uplift:Driven primarily by the Perry's acquisition, offsetting lower results in the base business.

• Normalized EBITDA:Remained positive at $2.8 million, showing slight improvement over the prior year.

• Net Loss After Tax:Reported a net loss of $12.4 million for the six-month period.

• Cost Reductions:Achieved $12 million in cost savings over the past two years, with an additional $6 million annualized savings initiated in the first half of FY26.

• Net Debt:Increased due to the $30 million debt for the Perry's acquisition, with net debt over total debt plus equity at 20%.

• Operating Cash Flow:Positive at $5.6 million for the period.

• Inventory Levels:Reduced to $115 million at period end, with potential increase to $130 million as demand recovers.

• Skew Reduction:Reduced from 23,000 in December 2023 to about 15,000, focusing on higher value products.

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Release Date: February 24, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript .

Positive Points

• The Perry's galvanizing business acquisition has significantly exceeded expectations, providing consistent high-value earnings and offsetting margin squeezes in the base business.

• Manufacturing demand is on the rise, with the PMI in expansionary mode for 10 of the last 12 months, indicating a positive trend for future growth.

• Steel & Tube Holdings Ltd ( NZSE:STU ) has implemented structural cost reductions, removing about $12 million of costs over the last two years, effectively offsetting inflationary pressures.

• The company has diversified its exposure across growth markets, with manufacturing making up nearly 40% of revenues, positioning it well for economic recovery.

• Customer satisfaction scores remain high, and the company is maintaining market share while winning new customers, indicating strong customer loyalty and service quality.

Negative Points

• The first half of 2026 was challenging, with July being one of the slowest months due to weather, and the economic recovery has been patchy.

• Steel & Tube Holdings Ltd ( NZSE:STU ) reported a net loss after tax of $12.4 million for the six-month period, reflecting the lower demand environment.

• The board decided not to declare a dividend, indicating a cautious approach to capital management amid economic uncertainties.

• The base business margin has been under pressure due to a highly competitive environment, leading to some margin shedding to retain volumes.

• Net debt has increased year on year, partly due to the Perry's acquisition, and the company is focused on rebuilding balance sheet capacity.