International steelmaker and value-added products group BlueScope steel’s profits have plunged as a hit from weaker market conditions was compounded by the effects of the coronavirus.
The company, which has extensive operations in China, Asean, the United States and Australia, reported net profit after tax down 70 per cent in the first half to $185.8 million.
A rise in raw materials costs and falling prices for its products was the main contributor in the slump which hit US and Australian operations in particular.
NPAT for the half was down 72 per cent on the previous year in the US, where the company is expanding its North Star mini-mill, and in Australia by 60 per cent.
Profits rose slightly in the buildings group in North America, and in building products in Asia and North America.
Managing director Mark Vassella said despite the profit downturn underlying EBIT of $302 million “showcases yet again that BlueScope’s turnaround and transformation is real.
“The result is more than creditable in light of the weaker cyclical spreads…BlueScope is now a resilient, global company with a strong balance sheet and high-quality assets.”
BlueScope’s seven manufacturing sites in China and sales and marketing operations are now operational following disruption from the coronavirus outbreak.
The company’s Hubei sales office is still closed.
Vassella said most Chinese employees had now returned to work and no cases of the virus were reported among staff.
“Outside of China we are aware of some impacts to our supply chains which, to date, have been mitigated.”
Vasella said the next stage of developing the company would focus on digital technologies to drive improvements and actively addressing climate change including “playing our part in the challenge”.
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