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The power of a fully franked 30cps dividend appears on full display more than anything else in BlueScope Steel’s (ASX:BSL) 1HFY25 report: Shares were up 12% to just shy of $25/sh on Monday morning.
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Notable is the scale of the jump in shares, especially given BlueSope used the classic words every company hates to write: Inflationary pressures has continued to impact its performance by way of higher costs.
Looking at the usual financial metrics vs PCP, BlueScope’s results only had one “green” arrow out of an entire column of indicators; it’s increased its dividend price.
Earnings, profits, earnings per share, and cash flow – all other metrics in today’s report were red. Make of that what you will.
“While an 8.1% return on invested capital is not at the level we would like to see, it is a solid result,” BlueScope CEO Mark Vassella explained today.
(That 8.1% return is arrived upon “as last 12 months’ underlying EBIT over trailing 13-month average capital employed,” per a footnote.)
“The business is in a much stronger place than a decade ago, and with the actions being taken to bolster near-term performance, the Company is well positioned to benefit from a recovery in these key external earnings drivers,” Vassella added, pointing to soft demand conditions outside the U.S.
“BlueScope continues to progress a range of initiatives and investments to both secure and grow its sustainable earnings.”
Except, Vassella isn’t talking about sustainability – surprisingly, its report included a section on climate change. I say surprising because look at America right now, where it has a fairly firm presence as far as ASX-listed companies go.
And that’s the other big question for BlueScope: How Trump’s proposed steel tariffs may or may not impact the company (if they ever happen at all).
For now, the market’s happy with BlueScope. Behold the mighty dividend.
BSL last traded at $24.75.
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