VULCAN STEEL LIMITED (VSL)
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25/10/2024

3

Hold

$6.85

-15.54%

Management at Vulcan Steel expects the steel market will remain soft through 2024 but is optimistic on 2025 given the decline in New Zealand interest rates has resulted in notable lift in business confidence.

An update on Q1 trading conditions revealed a -13% year-on-year fall in revenue and earnings (EBITDA) also declined by -30%.

Hold. The target rises to $6.85 from $6.70. The analyst notes trading conditions are expected to improve in Australia alongside a lift in business confidence, subject to present industry disruptions abating.

FORECAST
Morgans forecasts a full year FY25 dividend of 18.25 cents and EPS of 5.11 cents.
Morgans forecasts a full year FY26 dividend of 21.90 cents and EPS of 23.63 cents.

13/02/2025

3

Neutral

-

-

First-half earnings (EBITDA) of NZ$57m for Vulcan Steel exceeded Jarden's estimate of NZ$51m but were down -30% year-on-year, with the dividend reduced to just NZ2.5 cents from NZ12 cents.

The broker highlights tough trading conditions, with New Zealand in recession and below-trend economic growth in Australia, resulting in declining volumes and margins.

Despite ongoing challenges, management pointed to signs of stabilisation in certain segments, with trading volumes in New Zealand expected to recover from the second or third quarter of 2025, while the metals segment in Australia remains relatively steady.

Jarden lifts its FY25 earnings (EBITDA) forecast to NZ$110m from NZ$107m but maintains a Neutral rating with an NZ$8.00 target.

FORECAST
Jarden forecasts a full year FY25 dividend of 6.84 cents and EPS of 11.22 cents.
Jarden forecasts a full year FY26 dividend of 19.07 cents and EPS of 31.85 cents.