Steelmaker BlueScope Steel set the market on fire on Friday with a sharp upgrade to first-half earnings.
The shares rose 10.86% to $15.92 on Friday after the company told the market its underlying earnings before interest and tax (EBIT) to be around $340 million for the December half-year.
That will be up more than 12% from the first half of 20-19 and 30% above the June half figures (which were depressed by the fact of the pandemic on steel demand here, in the US and Asia).
CEO, Mark Vassella said in the update “Despite the global disruption caused by COVID-19, we’ve had a solid performance from all of our operating segments for the three months to 30 September. This is a clear demonstration of the effectiveness of BlueScope’s strategy and the resilience of our asset portfolio.”
The company said steel profit spreads have improved and demand in most markets is recovering
This, it said is being underpinned by the current strength in alterations and additions activity, demand for detached housing, rapid growth in e-commerce and logistics, and the recovery of the US automotive industry.
Management also advised that its major expansion project at North Star in the US state of Ohio is on track, group cash flow remains robust, and its balance sheet is in excellent condition.
And financial services records group, Link has rejected the $2.8 billion takeover private equity bid, claiming it materially undervalued the company.
However, it has proposed to spin off its property settlements platform PEXA and will update investors in November (which seems to have been the object of the bid.
Private equity firms Pacific Equity Partners and Carlyle Group offered to buy 100 percent of the company’s shares earlier this month, for a price lower than what PEP initially floated the company for in 2015.
Investors were split on whether the takeover bid would be good news for Link, with Perpetual backing the deal and Yarra Capital urging Link should wait for a better offer.
