BLUESCOPE CONTINUES STRONG RUN WITH GUIDANCE UPGRADE

BLUESCOPE CONTINUES STRONG RUN WITH GUIDANCE UPGRADE
BLUESCOPE Steel (ASX: BSL) is trading up 7.51 per cent at $11.16 per share after upgrading its half-year guidance this morning.

The company expects its underlying earnings before interest and taxt (EBIT) for the six months ended 31 December 2016 to be around $600 million, compared with prior guidance of $510 million.

The company puts this 160 per cent growth on earnings compared to the first half of FY16 down to three main points:
  • stronger steel prices and spreads across its businesses particularly benefitting its Australian Steel Products and New Zealand and Pacific Steel operations;
  • the impact of stronger than expected iron ore prices on export iron sands profitability; and
  • productivity improvements, including further cost reductions, in the Australian Steel Products, North Star BlueScope Steel and New Zealand and Pacific Steel segments.

The company says its North American operations benefited from higher steel prices and margins, while its India business saw positive earnings growth with higher margins and volumes.

The company's debt is expected to be around $530 million,  a multiple of 0.4 times underlying EBITDA, in the 12 months ended 31 December 2016.

Bluescope is expecting to take a $65 million impairment in the half year after reconfiguring its China buildings business, investing in capital expenditure at its Tahora export iron sands business, and restructuring of the India engineered buildings business.

The Melbourne-based company has enjoyed a strong run since around October 2015, when it made 500 staff redundant and renegotiated its EBA with staff at its Port Kembla steelworks and finalised the purchase of the North Star steelworks in the United States.

The company is trading well above its 12-month low of $4.16 after a succession of earnings upgrades over the past 18 months.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

A game changer? Aspiring to the new standard on workplace mental health
Partner Content
Work health and safety regulators have been more active in the area of mental health ri...
Aon
Advertisement

Related Stories

Aristocrat Leisure to buy online gambling giant Playtech for $5 billion

Aristocrat Leisure to buy online gambling giant Playtech for $5 billion

Australian pokies maker Aristocrat Leisure (ASX: ALL) is looking to...

Melbourne to leave lockdown on Friday with state set to hit vaccine milestone early

Melbourne to leave lockdown on Friday with state set to hit vaccine milestone early

High rates of vaccine take-up have put Victoria in a position to le...

How the technology “no one in Australia wanted” launched with Samsung

How the technology “no one in Australia wanted” launched with Samsung

While Australian researchers worked to develop solutions in a world...

Victoria reopening to fully vaccinated NSW travellers from next Wednesday

Victoria reopening to fully vaccinated NSW travellers from next Wednesday

Changes to state border arrangements are coming in thick and fast t...