BlueScope Steel earnings results

CommSec CommSec

 

26 February 2019

Results ($m)

Half Year 2019

Half Year 2018

Change

Sales Revenue

6,398.1

5,448.4

+17%

Reported NPAT

624.3

441.2

+42%

Underlying NPAT

613.5

327.0

+88%

Underlying EBIT

849.6

524.2

+62%

Australian Steel Revenue

2,869.9

2,565.7

+12%

Net Cash /(debt)

127.5

(262.1)

n/a

Final Dividend ($)

0.06

0.06

Unch

BlueScope Steel Ltd (BSL) beats own guidance; announces share buyback 

 

Results

  • Australia’s largest steel manufacturer, Bluescope Steel (BSL) has increased first half Net Profit After Tax by 42% to $624.3 million. Underlying Earnings Before Interest & Tax also beat the company’s own guidance, coming in at $849.6 million.

Drivers

  • Bluescope CEO, Mark Vassella said the result was “our best half on record. It was driven by strong demand and steel spreads in our U.S. and Australasian markets." The improvement was also aided by higher steel prices in other regions and benefits of a weaker AUD/USD exchange rate. The Group Underlying EBIT jumped 62% to $849.6 million on higher spreads, steel prices rising more than input costs. Earnings growth was highest at its North Star business (Ohio based steel mill) delivering an increase of 183% to underlying EBIT of $412 million with Australian steel its next best performer. 
  • The main weakness BSL’s business over the half was its Building Products Asia & North America along with its Buildings (construction) North America, as both segments recorded declines in underlying earnings for the period.

Dividend

  • BSL will pay an unfranked, interim dividend of $0.06 per share to eligible shareholders on 2 April 2019. The eligibility date or ex-dividend date will be 1 March 2019. BSL also has up to $207 million to return to shareholders via an on-market buy-back. 

Outlook

  • After a strong first half, BSL is expecting FY19 to be the third straight year of growth. Underlying EBIT is likely to be roughly 10% higher than FY18’s $1,269 million, despite 2H19 performance anticipated to be weaker than 1H19. The Australian steel unit is expecting a softer result due to lower spreads and softening in domestic volume. BSL is also looking to expand its North Star operations in the US and will target a final decision by 1H20.

Share price

  • BSL’s share price hit 3-month highs following the release of the first half results, climbing more than 6% for the day.

Tags:

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