Rising prices boost BlueScope to record

A swing to positive microeconomic conditions has powered steel producer BlueScope to a record result for the second half, with the company today reporting a preliminary operating profit for FY21 of $1.72 billion.

The record second half contribution was $1.19 billion, more than $100 million more than previously anticipated.

Factors driving the result include rising steel prices in the United States which has improved margins at its North Star and North American coated steel businesses.

Demand is also stronger in Australia and New Zealand and and the company’s overseas building products group boosted its results by more than 20 per cent.

CEO Mark Vassella said: “This is an outstanding result – our best underlying EBIT performance since demerger in 2002.

“The business has gone from strength to strength in the second half of FY21 and all operating segments have delivered significantly better results than (the previous year).

“The results reflect the positive macroeconomic environment with strong demand for our products, and the quality of our diverse portfolio.”

BlueScope’s Australian results are encouraging for other sectors of manufacturing.

Domestic construction, distribution and manufacturing segments of BlueScope continue to strengthen, particularly for coated and painted products, leading to domestic mill sales of 1.3 million tonnes, the highest since 2008.

Realised steel spreads in the year were ‘considerable stronger’ than the previous year and the company’s export coke business remained strong.

With NZ and Pacific businesses up 25 per cent, South East Asian businesses similar to the previous year, only Chinese businesses was weaker for seasonal reasons.

Picture: North Star BlueScope

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