BlueScope reports fiscal year profits

Melbourne, Australia-based BlueScope has announced an A$353.8 million (US$270 million) reported net profit after tax for its 2016 fiscal year, which ended 30 June 2016. The steelmaker operates integrated mills in Australia and in New Zealand and an electric arc furnace mill in Ohio in the United States

“BlueScope lifted underlying EBIT (earnings before interest and taxes) by 89% to A$570.5 million (US$435 million) through a combination of sales growth, cost reductions and the benefit of the North Star acquisition,” says the company’s Managing Director and CEO Paul O’Malley.

In October 2015, during the 2016 fiscal year, BlueScope completed its of 50% of the EAF mill in the U.S.purchase from United States-based Cargill, giving it complete ownership of the plant.

“Across our global portfolio, our people achieved these outstanding results while also continuing our safety journey to zero harm,” adds O’Malley. “Our direct interventions in reducing costs have significantly lifted performance of our steelmaking operations in Australia and New Zealand despite continuing global overcapacity and production that drove regional commodity steel spreads in the six months to 30 June 2016 to their lowest levels since BlueScope listed in 2002.”

Regarding the new fiscal year now underway, O’Malley comments, “Moving forward, we must not be complacent in our pursuit of continued productivity improvements. We need to deliver returns necessary to support a decision in 10 to 15 years to reline the blast furnace at Port Kembla [Australia]. What we have achieved in the last year is essential to being the competitive and profitable producer needed to support this future reinvestment opportunity. All stakeholders have a role to play in securing our steelmaking future,” he adds.

BlueScope’s net debt at 30 June 2016 was A$778.0 million (US$594 million), which the company says was reduced by A$595.4 million ($454 million) after 31 December 2015 “through strong operating cash flow.”