Steel Mills
BlueScope Increases Guidance on Strong North Star Performance
Written by Laura Miller
May 19, 2022
Improving results from North Star BlueScope are again causing Australian steel producer BlueScope Steel to raise its 2H FY2022 earnings guidance. The previous expectations of earnings before interest and tax (EBIT) for 2H of AUD $1.2 billion to $1.35 billion has been increased to $1.375 billion to $1.475 billion.
The company is expecting improving earnings from its North Star sheet minimill in Delta, Ohio, and its North American coated business, with better-than-expected realized steel prices and spreads in the US. The company recently celebrated North Star’s $700 million expansion project, which will boost the mill’s annual hot rolled coil production by 850,000 metric tons once complete. The first coil from the expansion is expected in the coming weeks.
To complement its West Coast coatings business, BlueScope announced in April that it would buy the second largest metal painter in the US, Coil Coatings, for $500 million. The deal is expected to close this calendar year.
In Australia, supply chain disruptions from flooding, rail outages, and Covid-related issues in the company’s steel products segment are being partially offset by stronger realized steel spreads and a strong performance from downstream businesses.
“Throughout recent macroeconomic and geopolitical volatility, BlueScope has continued to demonstrate strength and resilience in its business performance. In the current strong demand environment, the entire BlueScope team is working as hard as they can to improve our service levels, which have been impacted by supply chain and pandemic-related disruptions,” BlueScope managing director and CEO Mark Vassella said in the earnings guidance.
BlueScope will release its full financial results for fiscal year 2022 ending June 30 on August 15.
By Laura Miller, Laura@SteelMarketUpdate.com
Laura Miller
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