BlueScope Steel (ASX:BSL) has announced that its December
half-year results are expected to surpass the company's earlier forecasts, as
outlined in its October 20 guidance.
In an update released before the
annual meeting on Tuesday, the company stated that, "given the recent
significant increase in US benchmark spreads," it anticipates its
underlying earnings before interest and tax (EBIT) for the first half of FY2024
to be towards the upper end of the $620 to $670 million range.
Since the October update,
BlueScope's shares have risen by nearly 15%, with an additional half a percent
increase recorded on Tuesday after the meeting.
The company indicated that results
from its Australian, New Zealand, and Asian operations are likely to align with
the October estimates, remaining relatively stable compared to the second half
of 2022-23.
While the US market has seen
improvement in recent weeks, BlueScope acknowledges that results from its
growing operations there will still be below those of the previous year but
better than initially projected in the October 20 update.
In North America, BlueScope expects
a result moderately lower than that of the June half of 2022-23, with North
Star electric arc and associated businesses anticipated to perform
significantly better due to the recent increase in US benchmark spreads.
For Buildings and Coated Products
North America, BlueScope predicts a result approximately three-quarters of the
second half of FY2023, with margins easing slightly following a period of
notable strength.
The delay of a project sale
mentioned in the October 20 update has been offset by slightly stronger
performance in other segments.
In Australia, BlueScope expects the
business to deliver results similar to the second half of 2023, in line with
the October update, citing strong underlying domestic demand across key end-use
segments.
After 18 months of research,
analysis, and community engagement, BlueScope has completed the Master Plan
process for the development of a vision for the 200 hectares of landholdings
adjacent to the Port Kembla Steelworks. As part of this plan, the company has
signed a Memorandum of Understanding with TAFE NSW to explore the opportunity
for a 'Super TAFE' on the site.
In Asia, BlueScope's expectations
remain relatively unchanged since the guidance provided in August, with an
anticipated slightly better result than the second half of FY2023. While the
China business is expected to benefit from the typical favorable seasonality of
the December half, the ASEAN region is expected to deliver a slightly weaker
result. The India business is also expected to have a slightly lower result
than the second half of FY2023.
In New Zealand and the
Pacific, BlueScope's expectations for the business remain consistent with the
August outlook, projecting a first-half FY2024 result similar to the second
half of FY2023, with stable dispatch volumes attributed to solid activity
levels across end-use segments.