- Steel manufacturer BlueScope Steel (BSL) has updated its earnings guidance for the second half of the 2021 financial year
- The company previously predicted a range of $750 million to $830 million but now expects $1 billion to $1.08 billion
- BlueScope attributed this improved outlook to rapidly increasing steel prices in the U.S., where the company’s North Star segment operates
- North Star’s expansion project remains on track, with the new plant scheduled for commissioning in the 2022 financial year
- BlueScope Steel closed 0.5 per cent in the green to trade at $22.16 per share
Steel manufacturer BlueScope Steel (BSL) has updated its earnings guidance for the second half of the 2021 financial year.
The company previously predicted a guidance range of $750 million to $830 million in earnings before interest and tax (EBIT). Now, the company expects EBIT in the range of $1 billion to $1.08 billion, subject to spread, FX and market conditions.
BlueScope has attributed this improved outlook to a number of key factors, including rapidly increasing steel prices in the United States. Since an outlook was provided in February, Midwest benchmark HRC steel prices have risen by about US$250 (A$321) per metric tonne.
This has resulted in stronger-than-expected spreads, which the company expects will positively affect its North Star segment in the U.S. North Star’s expansion project remains on track, with the new plant scheduled for commissioning in the second half of the 2022 financial year.
BlueScope’s Australian Steel Products segments is also reaping the benefits of improved realised domestic and export steel spreads. Domestic despatch volumes are tracking ahead of the company’s expectations, especially for higher value products in the building and construction market.
BlueScope expects that its Building Products segment will also deliver an improved result over the earnings from the first half of the 2021 financial year. This is primarily because of expanding margins in the North American coated business — another result of increasing steel prices in the U.S.
BlueScope Steel’s Managing Director and CEO, Mark Vasella, commented that the company’s performance demonstrates the unique strength and value of its business model.
“The business has gone from strength to strength, benefitting from strong spreads, prices, and demand,” he said.
“BlueScope is a very different type of steel company and is in a compelling position to take advantage of emerging trends, such as demand for lower density and regional housing and for e-commerce and logistics infrastructure,” he added.
BlueScope Steel closed 0.5 per cent in the green to trade at $22.16 per share.