Vulcan Steel reported an 8.6% revenue increase to NZ$535.4 million for the half-year ending December 2025, driven by its Roofing Industries acquisition and Steel segment growth, despite a 9.7% drop in net profit after tax.
- Revenue rises 8.6% to NZ$535.4 million
- NPAT declines 9.7% to NZ$8.3 million due to acquisition costs and margin pressure
- Roofing Industries acquisition adds NZ$41.4 million revenue and NZ$3.2 million NPAT
- Steel segment shows strong volume and margin growth; Metals segment declines
- Operating cash flow halves to NZ$38.7 million amid working capital changes
Solid Revenue Growth Despite Profit Pressure
Vulcan Steel Limited (ASX: VSL, NZX: VSL) has released its half-year results for the six months ended 31 December 2025, revealing an 8.6% increase in revenue to NZ$535.4 million. This growth was largely driven by the strategic acquisition of Roofing Industries Limited and its subsidiaries, which contributed NZ$41.4 million in revenue and NZ$3.2 million in net profit after tax (NPAT) for the three months under Vulcan’s control.
However, net profit attributable to shareholders declined by 9.7% to NZ$8.3 million, impacted by acquisition-related costs of NZ$1 million and ongoing margin pressures across the business. Earnings per share fell to 5.8 NZ cents from 7.0 NZ cents in the prior corresponding period.
Segment Performance Highlights
The Steel segment was the standout performer, with revenue up 25.1% to NZ$262.5 million and sales volume increasing 16% to 89,405 tonnes. This segment also saw a 2.4 percentage point improvement in EBITDA margin to 12.9%, reflecting operational synergies from the rollforming division acquired through Roofing Industries. The rollforming business, a new vertical for Vulcan, typically operates at higher margins and is expected to enhance the overall product offering.
Conversely, the Metals segment experienced a 3.6% revenue decline to NZ$272.9 million, with sales volume down 1.8% and EBITDA margin contracting by 2.3 percentage points to 13.4%. This segment faced challenges from weaker volumes and lower average selling prices amid a competitive market environment.
Cash Flow and Capital Management
Operating cash flow halved to NZ$38.7 million, reflecting a much smaller reduction in working capital compared to the prior period. The company completed a NZ$93.8 million capital raising in September 2025 to fund the Roofing Industries acquisition and reduce net bank debt, which fell by NZ$30.1 million to NZ$202.3 million by the end of December.
Operating expenses rose 11.6% to NZ$124 million, driven by inflationary pressures and the integration of the new rollforming division. Employee numbers increased by 26.1% to 1,648, supporting enhanced customer service and growth initiatives.
Outlook and Strategic Positioning
Management remains cautiously optimistic about the market outlook, noting early signs of recovery in both New Zealand and Australia despite persistent inflation and interest rate risks. Residential consents and industry volumes have stabilised or improved in key regions such as Queensland and New South Wales.
Vulcan continues to focus on cost control, operational efficiencies, and leveraging its expanded product range through the rollforming acquisition. The company declared a fully franked and imputed interim dividend of 2.5 NZ cents per share, signalling confidence in its financial position.
Looking ahead, Vulcan aims to capitalise on a pending economic recovery and deliver higher returns on capital, while navigating competitive pressures and macroeconomic uncertainties.
Bottom Line?
Vulcan’s acquisition and operational gains set the stage for growth, but margin pressures and cash flow dynamics warrant close investor attention.
Questions in the middle?
- How will Vulcan manage margin pressures amid inflation and competitive markets?
- What integration risks or synergies will emerge from the Roofing Industries acquisition?
- How might rising interest rates in New Zealand and Australia impact Vulcan’s recovery trajectory?