BlueScope Steel, which revived its business in the face of a global steel glut, now says its expects earnings to be better than estimated.
Its shares jumped as much a 10% in early trade. A short time ago, they were at $6.35, up more than 8%.
The company today announced it expects underlying EBIT (earnings before interest and tax) for the six months to June to be around $270 million, a more than 29% improvement on the $209 million guidance in February.
BlueScope says the stronger performance has been driven largely by earlier delivery of cost cuts, higher steel and iron ore prices, better than anticipated Australian domestic business and better than expected margins in the international businesses.
What the company calls a “relentless” cost-cutting program has been making an impact. In February, the company today announced a doubling of profit to $200.1 million for the first half of the year.
In October last year, Bluescope announced what it called a “game changer” agreement with its employees to cut 500 jobs and freeze wages for three years.
The agreement is a significant part of the company’s $200 million cost cutting target. And it keeps the Port Kembla steelworks south of Sydney from shutting.
BlueScope also has a deal with the NSW government which will save it $60 million in payroll taxes.
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