BlueScope’s lower profit, with challenges ahead

Primary steel producer BlueScope Steel today reported FY2024 net profit after tax (NPAT) of $805.7 million – a $203.5 million decrease on FY2023 – the result coming with a warning of challenges ahead.

In a statement the Managing Director and CEO Mark Vassella said: “Underlying EBIT for the year was $1.34 billion, representing a solid performance in the context of macroeconomic and industry volatility.

“Whilst this reflects a lower result than FY2023, it again demonstrates BlueScope’s resilience, as strength in the US steelmaking and global downstream operations offset the impacts of bottom-of-cycle Asian steel spreads on our Australian and New Zealand steelmaking businesses.

“Operating cash flow for the year, after capital expenditure, was $434 million”

BlueScope’s lower profit was due to slightly lower earnings, higher working capital, and higher capital expenditure.

During the year, BlueScope continued its ‘Transform, Grow, Deliver’ strategy with highlights including

• The company continued the ramp-up of the North Star expansion and approved additional debottlenecking, together with an evaluation of a potential cold rolling and metal coating facility
• In Australia the company progressed a new metal coating line in Western Sydney, and the blast furnace reline and upgrade at Port Kembla in New South Wales
• In New Zealand, the installation got underway of an electric arc furnace at the Glenbrook site
• And the company freed up 1,200ha of land across Australia and New Zealand for development, including residential land supply at West Dapto and a SuperTAFE at Port Kembla.

BlueScope said it was seeing a convergence of macroeconomic challenges.

In Australia, performance is impacted by low Asian steel spreads, driven by high regional steel production and exports, which affect both steel prices and raw material costs.

In the US, while demand in steel-consuming sectors is stable, channel purchasing behaviour has seen the hot rolled coil spread fall to post-pandemic bottom-of-cycle levels.

“These challenges reinforce the importance of maintaining a globally competitive cost base whilst pursuing growth in domestic, value-add products.”

Picture: BlueScope