BlueScope shares lowers on profit fall, FY25 guidance
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More news: BlueScope shares fell after the steelmaker reported a 20% drop in full-year profit on the back of lower steel prices.
BlueScope shares were down 3.7% to $19.77 by 11:50am AEST.
RBC Capital Markets analyst Owen Birrell noted that BlueScope's full-year EBIT and NPAT were respectively 3% and 6% below consensus.
He flagged that guidance for the first half of FY25 was "very soft", coming in 24% behind average forecasts.
BlueScope posts 20% profit fall on tumbling steel prices
The news: BlueScope posted a 20% fall in full-year profit as lowering steel prices and softer Australia and New Zealand building and construction activity weighed on the steelmaker's earnings.
The numbers: BlueScope reported FY24 net profit after tax of $805.7 million, down 20% on FY23, as underlying net profit decreased 22% to $860.7 million.
Sales revenue reduced 6% to $17 billion as steel prices lowered year on year. Underlying earnings before interest and tax of $1.339 billion was 17% lower than FY23 due to softer steel spreads and higher costs.
Underlying EBIT of $376.9 million in Australia, coming in 30% lower year on year, weighed on the result. BlueScope said domestic despatches were softer in the year, driven by softer building and construction activity, as housing approvals contracted and the backlog from the previous year was worked through.
Underlying EBIT in New Zealand and Pacific Islands was 66% lower, while North America reduced 3% and Asia grew 13%.
BlueScope declared a final dividend of 30 cents per share, up from 25 cents last year. The group expects EBIT in the first half of FY25 to be in the range of $350 million and $420 million.
The context: Melbourne-based BlueScope said that at the start of the FY25 first half, it is seeing a convergence of macroeconomic challenges across its largest regions.
In Australia, performance is impacted by low Asian steel spreads, driven by high regional steel production and exports, which affect both steel prices and raw material costs. Inflationary pressures, including higher electricity costs, add to the challenges, the company said.
In the US, while demand in steel-consuming sectors is stable, channel purchasing behaviours has seen the hot rolled coil spread fall to post-pandemic bottom-of-cycle levels.
What they said: BlueScope managing director and CEO Mark Vassella said: "Underlying EBIT for the year was $1.34 billion, representing a solid performance in the context of macroeconomic and industry volatility".
"Whilst this reflects a lower result than FY2023, it again demonstrates BlueScope's resilience, as strength in the US steelmaking and global downstream operations offset the impacts of bottom-of-cycle Asian steel spreads on our Australian and New Zealand steelmaking businesses."
The source: ASX announcement
