BlueScope Announces EBIT of AUD 530 Million

BlueScope announced that it expects preliminary unaudited underlying earnings before interest and tax for 1H FY2021 to be around AUD 530 million.
BlueScope Announces EBIT of AUD 530 Million
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BlueScope announced that it expects preliminary unaudited underlying earnings before interest and tax for 1H FY2021 to be around AUD 530 million. This is above prior guidance of approximately AUD 475 milion. The results are subject to finalisation and external audit review. Managing Director and CEO Mark Vassdla said “All operating segments have performed well across the half. We have seen strong volumes and improving steel spreads in our largest steelmaking business in Australia and the US, along with strong earnings improvementsfrom our other businesses. The results are a continued demonstration of BlueScope’s operational leverage from our diverse portfolio of businesses and are a tribute to the efforts of our 14,000 people across all 18 countries.”

ASP delivered a substantially better preliminary result than 2H FY2020. Domestic construction and distribution segment demand has been strong, particularly for coated and painted products - leading to the strongest domestic mill sales wlumes in a decade, at about 1,175KT Steel spreads continued to strengthen towards the conclusion of the half, leading to a better than expected performance, including in preliminary net realisable

adjustments. The contribution from export coke remained elevated and exceeded 2H FY2020.

At North Star, spreads improved during the half from low levels. There was a significant increase in benchmark Midwest hot rolled coil prices, above raw material price rises, in recent months. Given usual pricing lags in the sales mix and foreign exchange translation, 1H FY2021 preliminary underlying EBIT was marginally lower than 2H FY2020.

The Building Products Asia & North America segment delivered a preliminary result approximately double that of 2H FY2020, with generally robust demand across its markets following interruptions in 2H FY2020 from COVID-19, favouurable seasonality and cyclical margin expansion due to steel feed costs. Margins and despatch volumes benefited the businesses incrementally since the update provided at the AGM.

At Buildings North America, consistent with previous comments, the core engineered buildings business delivered a better preliminary result than 2H FY2020. The contribution from BlueScope Properties exceeded last half including the approximately AUD 40 million additional contribution from the November property sale. This magnitude of contribution is not expected to be repeated in 2H FY2021.

As foreshadowed, New Zealand and Pacific Islands' performance improved substantialy on 2H FY2020, primarily due to a return to normal operations post-CCJVID-19 government mandated closure during 2H FY2020, very strong domestic demand particularly for coated and painted products and lower depreciation on the write-down impact. The segment has delivered a preliminary result exceeding AUD 55 million.

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