New Zealand-based Steel & Tube is laying off 150-200 employees in its production division as the COVID-19 pandemic has forced its hand, the company said in its fiscal Q3 earnings report.
The steel manufacturing company said lockdown restrictions will considerably impact its financial year, which ends June 30, and result in a production shortfall of approximately 10pc. The country’s construction industry, flagging the last couple of years, has created difficulties for the company.
Steel & Tube received NZD5.5 million ($3.4mn) from the government’s wage subsidy program, and it voluntarily reduced executive pay by 20-30 pc. The majority of staff have been unable to work, with only a small team remaining in place to support essential maintenance.
The firm is positioning itself in anticipation of the government’s infrastructure projects, which stem from the latter’s post-COVID-19 stimulus initiatives, according to Mark Malpass, Steel & Tube’s chief executive officer.
Steel & Tube posted NZD231.9mn in revenue during Q3 FY2020, with net losses of $37m through the first half of its 2020 fiscal. In FY 2019, Steel & Tube employed 1,003 workers, but the announced layoffs will reduce staffing by 15-20pc. FY 2019 revenue totaled NZD498.1mn, with a profit of NZD10.4mn. The company recorded net losses of NZD32.1mn in FY 2018, against NZD498.5mn in revenue.
Steel &Tube is the largest supplier, distributor, and processor of steel products in New Zealand. Products include coil and sheet, roofing, pipes, and structural including stainless steel selections.
$1=NZD1.63