Wellington, Aug 13 NZPA - Steel and Tube Holdings Ltd today reported a 15.9 percent rise in annual profit in a year of two halves.

Product was short and demand strong in the first half then demand and margins weakened in the second half .

The after-tax profit of $26.1 million in the year to June 30 was up $3.6m on last year.

Sales at $484m were $20m lower than last year. Sales were $274m in the first half and $210m in the second half.

The 9c a share final dividend is payable on September 30.

Acting chief executive Tony Candy said the international price of steel reduced in line with reductions in worldwide demand, but a drop in the NZ dollar meant the effect was not so apparent in the local market.

"There is considerable uncertainty as to when the New Zealand economy will emerge from recession," he said in comment on the outlook.

Construction projects associated with the Rugby World Cup will help sustain commercial construction and there is an expectation that infrastructure projects initiated by the government will assist volumes later in 2010 and beyond.

"Although there is a large degree of uncertainty as to the timing, there is some prospect of an improvement in 2010, if as economic forecasters predict the country emerges from recession and demand picks up," he said.