BlueScope Steel shares had an up, down, flat sort of day yesterday after the company lifted its guidance for underlying earnings before interest and tax (EBIT) for the second (June 30) half helped by stronger margins at its plant in the United States.
The company said underlying EBIT for the six months was now expected to be up by 12.2% to $680 million, compared to prior guidance of $606 million. the rise was due to better than expected margins on steel from its North Star mini-mill in Ohio.
The shares jumped more than 4% to a high of $18.79, before giving all of that back and more to settle down 1.3% at $17.78. The high for the day was the highest the shares have been since 2008.
BlueScope added that higher margins on coke exported from Port Kembla also helped its Australian steel products business.
Offsetting these gains somewhat, BlueScope said its building Products operations in ASEAN, North America & India will see “lower contributions from the ASEAN businesses due to lower volumes and margins with continued softness in the projects segment.”
This is being partly offset by stronger than expected margins in North America.”
"Our other businesses are performing well, and generally in line with our expectations set out in February," managing director and chief executive Mark Vassella said.
Oddly, the company didn’t give a full year underlying profit figure. The company earned an underlying EBIT of $517 million in the six months to last December. That points to a full year figure around $1.2 billion.
The company is due to report results for the 2017-18 financial year (including the second half) on August 13.
