BlueScope revised H2 FY2021 (January-June) earnings guidance to AUD1.0bn-$1.08bn ($774.4mn-836.5mn) as spreads strengthen amid rising prices and demand, according to the company’s business update. The company’s had in February guided underlying earnings before interest and tax (EBIT) to be in the range of $750mn to $830mn.
BlueScope’s North Star operations in the US have witnessed a stronger than expected spread with the Midwest benchmark HRC steel prices up by around US$250/mt. The company with benefit from its favourable sales mix in H2. The ongoing expansion project is on track and the new plant is scheduled to be commissioned in H2 FY2022.
Australian steel products business is also gaining from improved domestic and export spreads. The company’s domestic shipment volumes have exceeded expectations, especially for high-value products consumed by the construction sector. Also, the building products segment’s H2 earnings are expected to exceed H1 due to higher margins in the North American coated business amid surging steel prices.
BlueScope’s ASEAN region earnings are also expected to be higher than the prior forecast on increased realised margin due to improved steel prices.
The company is favourably positioned to benefit from emerging trends including demand for lower density and regional housing products and improved demand from the e-commerce and logistics infrastructure sectors, said Managing Director and CEO Mark Vassella as per the company release.