The rollforming and coatings businesses increased operating earnings by 11 percent. Stramit was in line with the previous December period’s earnings despite experiencing a slow start to the half as a result of unusually wet weather in parts of Australia. The lift in earnings reflected the acquisitions of Fair Dinkum Homes & Sheds and Eziform, both of which performed to expectations. The New Zealand rollforming business experienced a very competitive domestic market as both commercial and residential activity slowed.
Earnings in the long steel products business fell by 8 percent, affected by lower margins on ferrous and non-ferrous scrap in the Sims-Pacific Metals joint venture. Pacific Steel reached a satisfactorily settlement on its business interruption insurance claim resulting from the steel plant transformer failure in October 2006. This settlement had a favourable effect on the latest period’s result.
Pacific Steel’s sales increased by 8 percent, due mainly to increased export volumes. The strong New Zealand dollar during the half-year, kept import price pressure on the domestic market. Globally, strong demand for steel products and increasing freight and raw material costs are already starting to push prices higher. This is expected to continue into the second half of the financial year.
The distribution and services businesses, which include the EasySteel steel merchandising business, the CSP hot-dip galvanising business and the Cyclone fencing business, were able to hold operating earnings in line with the previous corresponding period.