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Bluescope profits plunge, company blames volatile economic conditions

Australia’s largest steel manufacturer BlueScope Steel has reported a lower profit amid volatile economic and industry conditions.

Feb 19, 2024, updated Feb 19, 2024
Senex Energy has struck a 10 year deal with Bluescope (photo: supplied)

Senex Energy has struck a 10 year deal with Bluescope (photo: supplied)

The company, which makes products used to build homes, sheds and fencing, reported on Monday a net profit of $439 million for the six months to December 31, down $160 million on a year earlier.

“We’ve seen real volatility across the global economy, particularly prevalent in the steel sector,” managing director Mark Vassella said.

Despite this, BlueScope has again delivered a “strong” result with progress on all key projects and a “robust” balance sheet for investing in future growth, he said.

Strong demand for steel is expected in the United States for large-scale infrastructure, steel-intensive renewable energy systems and buildings linked to e-commerce.

Underlying earnings were $718 million, $133 million lower than the same period a year earlier, the company said.

In the Australia division, underlying earnings were $258 million, down two per cent on the previous six months, on weakness in the final months of 2023.

Reflecting “unprecedented softness” in Asian steel prices, underlying earnings in the second-half of 2023/24 were forecast to be in the range of $620 million to $690 million.

One of Australia’s biggest carbon emitters, BlueScope recently partnered with leading iron ore producers BHP and Rio Tinto on an electric smelter pilot project.

BlueScope said it was also deepening collaboration with steelmaking technology partners ThyssenKrupp, Tata Steel and Posco.

BlueScope declared a fully franked interim dividend of 25 cents per share and increased the share buyback to $400 million over the next 12 months.

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