Posted on 23 Feb 2009
Bluescope reported profit for the first half of fiscal 2009 of $A407 million ($US261.54 million), up from $116 million in the prior corresponding period.
Revenue was $6.156 billion, up 30 per cent from $4.734 billion in the prior period.
Underlying profit was $479 million, after $305 million in the prior corresponding period, Bluescope said.
Bluescope declared an interim dividend of five cents, from 22 cents in the first half of fiscal 2008.
Bluescope said the outlook for the rest of the year now was weaker than expected, however.
"The outlook for the second half of FY09 is now weaker than anticipated," Bluescope managing director and chief executive officer Paul O'Malley said.
"We had factored in lost production due to the scheduled Blast Furnace No 5 reline.
"However, should lower demand and prices, coupled with high raw material prices, continue we expect to see a negative underlying NPAT contribution for 2H FY2009, the extent of which is dependent upon demand and spread."
Mr O'Malley described the interim result as "excellent", driven by a weaker Aussie dollar.
"However, in the second quarter of the reporting period, export sales from Australia were materially curtailed by the economic downturn around the world and the substantially lower demand for steel globally and in Australia," he said.
"We are also seeing lower international steel prices while still experiencing peak raw material costs."
The dividend cut from 22 cents to five cents reflected an unforeseen cut in demand and price now driving an expected downturn in financial performance during the second half, the company said.
Earnings per share were in at 52.7 cents, up from 15.7 cents during the previous corresponding period.
BlueScope said it expected a weaker second half of fiscal 2009 if lower demand and prices, coupled with high raw material prices, continued.
Mr O'Malley said the impact of government stimuli on steel demand was uncertain.
"We are focused on four key areas: a robust balance sheet; strong liquidity position; disciplined capital expenditure management and delivering an expected $150 million savings on existing and new cost management programs," he said.
"BlueScope Steel aims to emerge from the downturn with our position as a low cost, high quality steel manufacturer intact."
BlueScope's gearing ratio increased by 4.1 per cent to 35.9 per cent during the first half of fiscal 2009.
BlueScope said its dividend reinvestment plan will apply to the interim dividend.
Commenting on the federal government's proposed carbon pollution reduction scheme (CPRS), Mr O'Malley said BlueScope faced higher costs if the scheme went ahead, and this will put steel jobs and investment at risk.
"The proposed CPRS needs an effective transitional plan to minimise the financial impact in the early years and minimise competitive disadvantage to Australian industry until its major global competitors are carbon constrained.
"We are engaging constructively with the Federal Government with proposals that promote reductions in carbon emissions while protecting this vital manufacturing industry and Australian jobs."
