By Rhiannon Hoyle
Australia’s BlueScope Steel on Monday reported a 64% fall in full-year profit, reflecting a fall in market prices, but said it would top up its share buyback and proceed with a major project to shore up production at a steelworks near Sydney.
The company said it made a net profit of 1.01 billion Australian dollars (US$647 million) in the 12 months through June, down from a record A$2.81 billion in the year-earlier period.
Directors declared a dividend of 25 Australian cents a share, in line with the payout to shareholders a year ago, and said the increase to the buyback will enable the company to repurchase as much as A$400 million in stock over the next 12 months. BlueScope bought A$165 million of shares in the second half of fiscal 2023.
The steelmaker reported underlying earnings before interest and taxes of A$1.61 billion, down 58% year-on-year. BlueScope highlighted fiscal 2022 as a record year, and said its fiscal 2023 underlying Ebit was still the third-highest on record since the company listed in 2002.
“This continued strong performance demonstrates the resilience of the business model, particularly in the context of volatile macroeconomic and industry cycles,” said Chief Executive Mark Vassella.
BlueScope said it expects underlying Ebit of between A$700 million and A$770 million in the first half of fiscal 2024.
“The balance sheet remains strong with A$703 million net cash, positioning the group well in a period of increased capital spending on projects that underpin sustainable earnings and growth,” Vassella said.
BlueScope said directors have approved the A$1.15 billion reline and upgrade of the No.6 Blast Furnace at the Port Kembla Steelworks in Australia. The relined furnace is expected to be commissioned in mid-to-late 2026.
“Implementing the reline and upgrade project allows us the necessary time to develop, test and pilot alternative viable lower emissions iron making pathways,” the company said. “It also recognizes the practical reality of the time frames required for the establishment of the critical enablers to lower emissions steelmaking.”
BlueScope also recently approved a A$415 million expansion of metal-coating capacity in western Sydney. The project will cost more than previously expected, but will help the company meet rising demand for steel building and construction products, it said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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