SGM –4.04%: reported an improvement in underlying earnings for the half, but the result came in slightly below expectations, with the market focused on ongoing weakness in export markets tied to record-high Chinese steel exports.
- Revenue $3.78bn, +3.7% YoY
- Underlying profit $60mn, +71% YoY (vs $63mn est.)
- Net loss $29.9mn (vs $30.8mn profit YoY)
- Interim dividend 14cps (vs 10cps YoY)
Management pointed to sustained strength in non-ferrous demand and tariff support bolstering US conditions, though Chinese steel exports remain the dominant headwind, depressing electric arc furnace production and ferrous scrap demand.
After such a phenomenal run, the stock was priced to perfection, so it was always going to be tough to hit the mark here. The China dynamic is still the key swing factor for sentiment, though the result highlights improving profitability, so the stock looks set for some consolidation in the near term.
MM is neutral toward SGM
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