Posted on 25 Feb 2019
Bluescope said plans for US expansion remain on track as strong demand for its steel products drove a record $624.3 million net profit for the December half with expectations of a 10 per cent lift in earnings before interest at tax for the current year to $1.269 billion.
Bluescope chief executive Mark Vassella said the result was driven by strong demand, and profit margins in both the US and Australia along with a tailwind from foreign exchange rates.
"It's an excellent result, our best half on record. It was driven by strong demand and steel spreads in our US and Australasian markets," he said.
"We have delivered underlying EBIT of over $1.1 billion in each of the last two financial years. With this first half result, we expect an even stronger result for the third consecutive year."
Speaking of its plans to expand production at its US plant, Mr Vassella said the company is embarking on a final feasibility review with around $50 million assigned to the project ahead of a final decision on the project during the first half of the 2020 financial year.
"We believe the project has the potential to deliver compelling returns based on long-term historical spreads," said Mr Vassella.
He said the steelmaker doubled its cash position to $127.5 million for the December half and is progressing towards its target of $200 million to $400 million net cash. The company also announced an interim dividend of 6c per share and $250 million share buyback, announced in December, would continue.
"The balance sheet is robust, with great flexibility, and at present we expect to be able to fund the growth initiatives we are considering while maintaining shareholder returns," Mr Vassella said.
