BlueScope Steel is looking into whether it should boost its US steelmaking capacity by up to just under million tonnes to take advantage of President Trump’s tariffs on imports of steel into America.
BlueScope runs the North Star steel making business in the US state of Ohio and it will study adding 600,000 to 900,000 tonnes a year of capacity to the plant. That would add more than 40% to North Star’s capacity.
That expansion would take between two and three years and depending on the size, cost up to $750 million.
News of the study came as the company revealed its best profit in a decade, thanks to one off gains of $743 million. Underlying earnings were $826 million, up 26%, after stripping out those one off items.
Sales rose 9% to $11.5 billion.
BlueScope said on Monday that its profit had more than doubled over the 2017-18 financial year, surging to $1.5 billion, and the company unveiled a $250 million share buy-back. That’s on top of the existing $300 million share buyback.
Shareholders will be rewarded with an 8 cents a share final dividend. The 14 cents total payout is up 55% on 2016-17’s 9 cents a share.
BlueScope is forecasting a 10% increase for the first half.
BlueScope’s North Star steel mill makes 2.1 million tonnes of steel a year and employs about 400 staff It delivered a 6% profit increase in to more than $430 million, the company reported.
Profit at its Australian operations, including the Port Kembla steelworks, had climbed 28% to $587 million.
Shares in the company fell 1.4% yesterday to end at $17.61 in a market that was weaker all day.
But all is not rosy for BlueScope. The company’s employees at Port Kembla who accepted a pay freeze to save BlueScope’s Port Kembla plant from closure three years ago are about to cast votes on whether to strike to fight for substantial wage rises now that the business is profitable again.
The steelworkers’ union and BlueScope have been stuck in talks over the terms of a new workplace deal, with the union urging pay rises of 10% over three years.
BlueScope is offering rises amounting to 7.5% over three years, as well as a one-off payment of $1500 once the deal is struck. It is also offering employees a profit-share arrangement.
