Vulcan Steel (ASX:VSL) reported its half-year FY26 results and provided an update on trading conditions in Australia and New Zealand, with management highlighting the contribution from the Roofing Industries acquisition, ongoing margin pressure across parts of the business, and early signs of improving activity in both markets.
Half-year performance and acquisition contribution
Management said revenue for the half was AUD 535 million, up 8.6% year-on-year, which included three months of sales from Roofing Industries following Vulcan’s acquisition of the business. The company noted that the first half of FY26 included the impact of Roofing Industries from 1 October.
Vulcan’s board approved an interim dividend of AUD 0.025 per share, which management said would be fully franked and imputed.
EBITDA, volume, and segment commentary
CFO Kar Yue said the 8.6% revenue increase reflected three factors:
- Contribution from the Roofing Industries acquisition
- An improvement in underlying volume
- Lower revenue per ton, which partially offset the first two items
EBITDA for the half was AUD 57 million. Management said earnings were offset by ongoing industry pressure in parts of the business and “some participant off margin for volume.” Despite the operating environment, the CFO said cash flow and return on capital “encouragingly remains sound.”
Discussing the drivers of the earnings change, the CFO pointed to 11% higher overall volume, which contributed to profitability, alongside the impact of lower revenue per ton and higher operating costs. He added that higher operating costs were partly driven by investment for growth.
At a segment level, management said the steel segment result in the first half was ahead of a year ago. In the metal segment, performance was described as mixed across Australia and New Zealand, with segment EBITDA referenced at AUD 37 million and said to reflect a combination of volume and margin outcomes.
Cash flow, capex, and balance sheet
Management said the business generated AUD 16 million in free cash (after capex and lease-related lines), before including capital raising, the initial acquisition payment, or dividends.
Vulcan guided to capital expenditure of AUD 30 million to AUD 35 million for the full financial year. On the call, management clarified that this represented an increase versus prior expectations due to incremental capex associated with Roofing Industries going forward.
Net debt finished the half at AUD 202 million, with net debt at 2.9 times on a pre-IFRS 16 basis for covenant purposes, according to management.
Operations, footprint, and integration update
Management said the integration of Roofing Industries was “on track,” and emphasized continued focus on delivery metrics and ensuring “the right stock in the right location at the right time.” The company also said it continued executing its “hybrid rollout strategy,” with three sites completed in the first half of FY26.
With the acquisition, management said the company now has four divisions under its steel segment and three existing divisions under its metals business. Management also outlined the group’s sales mix, stating that metals represented 89% of sales, with Australia 61% and New Zealand 23% of total sales.
Vulcan said that with Roofing Industries included, it now has 81 sites across Australia and New Zealand and serves over 25,000 customers.
Market conditions, pricing, and outlook themes
On the outlook, management described conditions as still challenging but improving at the margin.
In Australia, management said activity has been increasing in the steel division in the second quarter, though “off a low base,” and noted industry profitability remained pressured. The company also said it had not seen Olympic-related project activity in Queensland and did not expect meaningful impacts in the current year, with timing “likely to be pushed out to FY27 and beyond.”
In New Zealand, management said signs of recovery were beginning to emerge, with positive improvement in activity in Q2 of FY26, though conditions remained challenging.
From a global perspective, management cited uncertainty and said steel prices had remained subdued, while noting price pressure in other materials: aluminum and nickel had increased over the last couple of months.
During Q&A, management addressed industry news flow regarding alleged dumping and safeguard measures related to fabricated steel imports into Australia. The company said a proposal had been submitted pre-Christmas and it was not expecting an outcome until later in the year. Management said offshore fabrication imports had increased from around 300,000 tons to about 700,000 tons over the last 18 months, and described a potential policy approach that could cap volumes and introduce a charge or tariff on 200,000 tons. However, the company emphasized that the potential impact was unknown and said it did not have forecasts or projections to provide.
Management also commented on competitive dynamics, noting that in Australia it had seen a competitor close some locations, which initially drove some additional volume, but said that impact was starting to “rationalize.” In New Zealand, management described ongoing pressure and a drive among market participants to grow volume, and said execution of price increases in the first half was “mixed.”
On working capital, the CFO said investors should expect some increases over the next 12 to 18 months, partly due to rising material prices and the need to support demand as the cycle recovers, while noting the impact within the current financial year would not be substantial due to lead times.
On Roofing Industries specifically, management cautioned against extrapolating one quarter of performance, noting the company was still early in building its understanding of seasonality across commercial and residential channels. Management said December quarter volume contribution was expected to be slightly higher based on what it had seen so far, and characterized early performance as encouraging.
About Vulcan Steel (ASX:VSL)
Vulcan Steel Limited, together with its subsidiaries, engages in the sale and distribution of steel and metal products in New Zealand and Australia. The company operates through Steel and Metals segments. It sells hollows; merchant products, including bars, beams, angles, channels, and unprocessed coils and plates; stainless steel products, such as hollows, bars, fittings, and sheets; and high-performance steel and metal products. The company also provides cutting, drilling, tapping, countersinking, and folding of plates, as well as sheeting and slitting services.
