Australia and New Zealand metals distributor and processor Vulcan Steel has further pared back its full year earnings forecast following higher than expected costs for the integration of the Ullrich aluminium businesses.
The Australian and NZ listed company said EBITDA for the 12 months to June 2023 would be between NZ$205 to $209 million, down from the previous NZ$215 and $230 million.
Excluding integration costs of $10 million, up from the $5 million previously expected, profits are still expected to be down on lower trading volumes.
Chief Executive Officer and Managing Director Rhys Jones said: “As signalled…we expected the 2023 financial year to be more challenging.
“Vulcan’s FY23 underlying earnings have been broadly in line, albeit near the low end, of our expectations.
“The company’s overall margins have been tracking to our expectations with volume excluding aluminium down 13 percent in FY23 compared with FY22.”
Vulcan operates 72 warehousing, manufacturing, and processing facilities in Australia and New Zealand, employing over 1500 staff, across six business divisions.
In 2022 the company bought the Australia and NZ businesses of Ullrich aluminium in a deal worth NZ$165 million.
The company distributes a wide range of steel products as well as flat, rolled and extruded aluminium products.
Jones said market conditions remained uncertain with potential for further weakness in NZ ahead of the upcoming general election.
“Having completed the systems migration for our aluminium business…we are now focussed on bedding down the process and operations for our new aluminium unit.
“We expect the integration benefits to become more evident in our financial performance in the second half of FY24.”