Growing Australasian steel and steel products producer BlueScope Steel Ltd (ASX: BSL) told shareholders at the annual general meeting in Sydney on Friday it still expected its guidance on earnings before interest and tax for the first half of FY2019 will be about 10% higher than the second half earnings for FY2018.
That realised figure was $A745 million ($NZ795.3 M) subject to spread, FX and market conditions.
BlueScope chairman John Bevan said that since completing transformational cost savings initiatives and the acquisition the balance of 50% of North Star in North America it did not own, the company has now delivered an underlying EBIT of over $A1.1 billion in each of the last two years.
Bevan said there has been organic growth opportunities across the portfolio in markets as diverse as India, ASEAN, China, the US, Australia and New Zealand.
“One example, of significance, as announced in August we have initiated a comprehensive study to expand our North Star business in Ohio, to add up to 900,000 tonnes per annum of steelmaking capacity.”
Managing director Mark Vassella said of the New Zealand Steel and Pacific Steel divisions that demand continued to be robust, particularly in residential construction and infrastructure.
Steel prices have generally been stronger in these regions than in the last half. However, this benefit has in part been offset by higher raw material costs – particularly coal.
Performance was also affected higher costs driven by broader NZ gas and electricity supply issues. However, revenue from sales of vanadium slag had been favourable on higher pricing.