Posted on 19 Aug 2020
Australian steelmaker BlueScope reported net profit for the 2019-2020 fiscal year through June 2020 of AUD 96.5 million ($69.79m), a decrease of -91% on-year. This includes a AUD 197m non-cash write-down of the New Zealand and Pacific Islands segment. Underlying net profit was AUD 353m, Kallanish notes.
The company's total underlying Ebit in the reporting year declined by -58% y-o-y to AUD 564m. Chief executive Mark Vasella says the result was strong in the view of the Covid-19 impact.
BlueScope's Australian steel arm earned underlying Ebit of AUD 305.1m, down by -43% compared with the previous fiscal year. Steel spreads were compressed, driven by weaker regional steel prices and higher raw material costs, while coke margins weakened, the company explains. Domestic sales increased to 2.17 million tonnes, up 3% y-o-y.
However, New Zealand and Pacific Islands delivered an underlying loss before interest and tax of AUD 5.8m, compared to a profit a year earlier of AUD 80.6m. This was driven by lower steel prices, lower vanadium contribution, high costs and the impact of the government-enforced shutdown during April.
Vasella says that if the New Zealand steel plant cannot reach AUD 30-50m earnings from operations, the steelmaking operations at Glenbrook may close. The Glenbrook steel plant produces long and flat steel, mainly using locally-sourced iron sand and coal to manufacture about 650,000 tonnes/year of slab and billet.
Source:Kallanish
