BlueScope earnings hit amid warnings of tougher second half
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The news: Australia's largest steelmaker BlueScope saw earnings decline in the December 2023 half, with net profit down nearly 30% on soft Asian demand.
The numbers: BlueScope recorded net profit after tax of $439.3 million, down 27% year-on-year. First half underlying earnings fell 16% to $718.4 million, with expected earnings for the second half expected to be lower at between $620 million and $690 million. It pointed to lower steel spreads and higher costs for the fall which led to the net profit decline.
Total sales revenue decreased 8% from $9.3 billion to $8.5 billion compared to the prior corresponding period, owing to lower selling prices and lower dispatch volumes. However, this was partially offset by favourable impacts from a weaker Australian dollar exchange rate.
Despite the downturn, BlueScope declared an interim dividend of 25 cents per share, in line with last year's first half, and an on-market buyback of up to $400 million.
The context: BlueScope — which was awarded $136.8 million in federal funding last month as part of its Critical Inputs to Clean Energy Industries (CICEI) program — warned that it expected weaker second-half results due to "an environment of unprecedented softness in Asian steel spreads".
What they said: CEO Mark Vassela said the company had seen "real volatility across the global economy, particularly prevalent in the steel sector".
The source: ASX announcement
