BlueScope Steel Reports 64% Drop in Full-Year Profit

Introduction

BlueScope Steel, the Australian steelmaker, has announced a significant decrease in full-year profit, largely due to declining market prices. Despite the challenging conditions, the company remains committed to shareholder value through a share buyback program and a major project to enhance production at a steelworks near Sydney.

Financial Performance

In the 12-month period ending June, BlueScope Steel recorded a net profit of 1.01 billion Australian dollars (US$647 million), which represents a substantial decline compared to the record profit of A$2.81 billion achieved in the previous year. The company's directors have declared a dividend of 25 Australian cents per share, consistent with the payout to shareholders in the previous year. Furthermore, BlueScope intends to reinforce its commitment to shareholders by increasing its share buyback program by up to A$400 million over the next year. In the latter half of fiscal 2023, BlueScope has already repurchased A$165 million worth of shares.

Sales Performance

BlueScope's underlying earnings before interest and taxes for fiscal year 2023 amounted to A$1.61 billion, marking a 58% decline compared to the previous year. Despite this decrease, the company emphasizes that fiscal year 2022 was a record-breaking period, and its underlying EBIT for fiscal year 2023 remains the third-highest since its listing in 2002.

CEO Statement

Mark Vassella, Chief Executive of BlueScope Steel, stated, "This continued strong performance demonstrates the resilience of our business model, particularly in the context of volatile macroeconomic and industry cycles."

As BlueScope Steel navigates through challenging market conditions, it remains committed to delivering value to its shareholders and driving long-term success through strategic initiatives.

BlueScope Expects Strong First Half Results in Fiscal 2024

BlueScope has stated that it anticipates an underlying Ebit (earnings before interest and taxes) of between A$700 million and A$770 million in the first half of fiscal 2024. CEO Mark Vassella highlighted the company's robust balance sheet, with A$703 million in net cash, positioning them well for increased capital spending on projects that drive sustainable earnings and growth.

Reline and Upgrade of Blast Furnace at Port Kembla Steelworks

Directors at BlueScope have given the green light for a major project at the Port Kembla Steelworks in Australia. The A$1.15 billion reline and upgrade of the No.6 Blast Furnace aims to enhance efficiency and productivity. The relined furnace is expected to be commissioned in mid-to-late 2026. This project also provides an opportunity to explore and test alternative iron making pathways with lower emissions, aligning with the company's commitment to sustainable steelmaking.

Expansion of Metal-Coating Capacity in Western Sydney

In response to growing demand for steel building and construction products, BlueScope has recently approved a A$415 million expansion of their metal-coating capacity in western Sydney. This investment will support the company in meeting rising market needs and ensure they remain at the forefront of the industry.