Bluescope lifts second half earnings guidance

Bluescope has upgraded its earnings guidance for the second half of this financial year, with the main contributor to this the recently-expanded North Star mill in Ohio, as well as the North American coated products and the local Australian Steel Products division.

The steel company announced on Monday morning that guidance for earnings before interest, interest and tax for the second half has improved from a range of $480 – $550 million to between $700 million and $770 million.

CEO Mark Vassella acknowledged improved prices and spreads – “particularly in the US” – but added that “the strength and resilience of operating a diverse portfolio of high-quality assets” had played a role.

The North Star mini-mill is expected to see a 50 per cent improvement in EBIT in the half, “driven by stronger than expected hot rolled coil prices and spreads”.

An upgrade to the mill, which added 850,000 tonnes of extra capacity, was completed last year.

The North American coated products business, comprising Steelscape and ASC Profiles, had seen better margins due to higher US steel prices.

Australian Steel Products – which includes branded products such as Colorbond, Zincalume and Lysaght – was also enjoying stronger than expected realised selling prices, with similar despatch volumes expected compared to the first half.

The company said full-year results will be released on August 21.

Picture: credit BlueScope/North Star

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