BlueScope Steel’s FY21 earnings of $1,724m were inline with preliminary results, while earnings guidance of $1.8-2.0bn was 50% above consensus of $1.28bn.
The company announced a $500m buyback, plus a shift to 50cps dividends, FY21 31cps ordinary plus 19cps special.
Following the result, Credit Suisse increases FY22 earnings 23%, with higher North Star spreads and better Australian Steel Products (ASP) pricing being the main differences.
The company confirmed that it intends to retain more cash in the near term relative to its target of zero net debt ($400m including leases), and to declare dividends/buybacks only out of received cash rather than projected after only after growth capex has provided for.
Target rises to $26.00 from $25.20, Neutral retained.
Sector: Materials.
Target price is $26.00.Current Price is $25.76. Difference: $0.24 – (brackets indicate current price is over target). If BSL meets the Credit Suisse target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
