|
|
| |
|
|
Steel & Tube expects 2019 profit following downgrade- The 19th China (Guangzhou ) Int’l tube & pipe Processing Equipment Exhibition
5/28/2018 管材展-鋼管展-steel tube expo-tube &pipe expo |
--------------------------------------------------------------------------------------------------------------- |
|
Business Desk reported that Steel & Tube Holdings investors can expect a return to profitability in 2019, following a significant downgrade which has seen the stock shed up to a quarter of its value. Earlier , the Lower Hutt based business said it expects to post a loss before interest and tax of about USD 38 million this financial year, from positive ebit of USD 31.1 million a year earlier, and breach its banking covenants after a restructuring that will see it exit its plastics business and write down the value of its assets.
It said normalized ebit would be about USD 16 million, excluding non-trading costs and impairments of up to USD 54 million. On a conference call this morning, chief executive Mr Mark Malpass said shareholders could "absolutely" expect a return to profitability in the next financial year. He said that "These are one-time non-trading impacts we''re taking that are associated with legacy issues."
The USD 54 million in writedowns is comprised of USD 12 million from selling its plastics buisiness, USD 18 million on inventory from its new enterprise resource planning system, and USD 10 million on other intangibles. The company also took a USD 5.5 million impairment on inventory in the first half, and Malpass said USD 2 million came from business changes within its reinforcing division, USD 1.8 million from restructuring, and USD 4 million in other one-offs.
Chief financial officer Greg Smith said the company doesn''t anticipate any equity raising, though it will breach its ebit to interest cover ratio, of a minimum of 2.25 times, and possibly another covenant temporarily, and is seeking a waiver from its banking partners.
Mr Smith said that "These are some significant writedowns for us but we''re moving forward from this point, and the changes we''re making and looking to drive underlying earnings back into the business, we''re not anticipating any equity raise is required. We''d expect to operate back within our covenant levels on a go-forward basis."
Mr Malpass said he hoped the market hadn''t lost faith in the company, with the stock down 24 percent when the market opened, and recently trading at USD 1.57, down 21 percent. He added that "We''re very confident between the board and management that this is a great business, it''s a strong Kiwi company that''s been in operation for over 60 years and we see that continuing for another 60 years. It''s a lot of money and something we''re very disappointed with as a team, but they''re largely legacy issues we''re cleaning. This is a new broom coming through and refreshing the business, you can expect there are going to be some one-time impacts that we''ve crystallised in this announcement and we''re moving forward from this point."
管材展-鋼管展-2018廣州國際管材及管材加工設備展－中國展出效果最好的管材展-巨浪展覽
- The
19th China (Guangzhou ) Int’l tube & pipe Processing Equipment Exhibition
-Tube exhibition, Tube expo,2018 Tube
exhibition,2018 Tube expo, China Tube exhibition, China Tube expo, pipe
exhibition, pipe expo, 2018 pipe exhibition,2018 pipe expo, China pipe
exhibition, China pipe expo, Guangzhou pipe exhibition, Guangzhou tube
exhibition, Guangzhou pipe expo, Guangzhou tube expo
|
|
|
|
|
