Bluescope Steel is back in profit

China Photos/Getty Images

Bluescope Steel has posted a full year net profit of $136.3 million, the company’s best performance since the GFC.

The result was $218.7 million better than 2014. Underlying profit of $134.1 million is 9% higher.

Managing director Paul O’Malley says all but one of the company’s divisions posted an increase.

“We have a strong competitive advantage in global markets – highlighted by our outstanding brands, technology, channels to market and manufacturing footprint,” he says.

“We are the third largest manufacturer of painted and coated steel products globally, the number one in building and construction markets and the recognised quality leader in nine countries.”

As global steel prices slide following falling demand in China and increasing global output, the Australian producer plans to cut annual costs by $200 million by the 2017 financial year.

Asian hot rolled coil steel prices are now below $US200 per tonne, down from an average of around $US295 per tonne.

“At these prices, it would be more competitive to externally source steel substrate than to continue to operate our Australian and New Zealand steelmaking operations – unless we deliver a game-changing approach to costs to improve their competitiveness,” O’Malley says.

The company expects underlying earnings in the first half of 2016 to be similar to the previous six months.

The company is benefiting from good Australian residential building activity and a cheap dollar against the US dollar.

The board approval a fully franked dividend of 3 cents a share.

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