Posted on 20 Nov 2015
The steelmaker (BSL) reaffirmed its late-October guidance for a 40 per cent lift in earnings before interest and tax to about $50 million for the six months to December.
“The Australian businesses are benefiting from earlier delivery of cost reductions, growth in domestic demand including from residential construction and the lower Australian dollar. These benefits are expected to more than offset weaker steel spreads and deliver better underlying earnings for the half,” chief executive Paul O’Malley told BlueScope’s annual meeting.
Mr O’Malley said cost reductions in its New Zealand and Pacific steel division were “largely offsetting” weaker steel and iron ore prices, with the unit to deliver strong earnings growth in the half. He said the company’s building products unit was another expecting a lift in the half while its North Star Steel division “will make a strong contribution again this half.”
But Mr O’Malley said margin pressure would bite in the second half with spot steel spreads lower than lagged spreads.
“Expectations are subject to spreads, FX and market conditions,” he said.
Meanwhile, chairman outgoing Graham Kraehe formally handed over the reigns to John Bevan at today’s AGM.
“I would like to thank everyone involved in BlueScope over the past 13 years,” Mr Kraehe said. “It has been one of the most turbulent economic periods, but from a personal perspective I am proud that the foundations have been laid for BlueScope’s continued growth.”
