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BlueScope announces 1H FY2018 results

February 28, 2018 • News

BlueScope has released its half year financial results for the six months ended 31 December 2017.

The company has posted a $441.2 million reported net profit after tax (NPAT) for the first half of FY18, including one-off benefits of $84.2 million – a 23% increase on the prior corresponding period.

According to the company, underlying NPAT was $321.1 million – down 32% on the first half of the prior year – while underlying Earnings Before Interest & Taxes (EBIT) was $516.8 million, similar to last year’s result.

BlueScope’s Australian Steel; Products segment delivered underlying EBIT of $261.7 million – down 5% on the same time last year – after executing the $32.1 million benefit from the settlement of the historical coal supply dispute.

Commenting on the results, the company’s Managing Director and CEO Mark Vassella said BlueScope had delivered strong shareholder returns with a “very positive” EBIT performance and a $150 million extension of the buy-back.

“With business performance and economic conditions improving particularly towards the end of the half and with the benefit of the recent $32.1 million coal supply dispute settlement, the final result was better than expectations”, he said.

“We continue to see the benefits of our strategic initiatives flowing through to the bottom line, and our businesses are generating strong cash earnings. Net debt at 31 December 2017 was $262.1 million, reduced by over 50 per cent from 31 December 2016. The leverage multiple4 at 31 December 2017 was 0.2 times EBITDA.”

BlueScope’s Chairman John Bevan said the Board was pleased to approve the return of $340 million to shareholders during CY2017 through dividends and the on-market buy-back, while at the same time investing capital in growth and reducing net debt.

“In light of the Company’s strong cash position, the Board has approved the payment of a partially franked interim dividend of 6.0 cents per share. As well, the Board has extended the on-market share buy-back by a further $150 million,” he continued.

“The Board believes the buy-back achieves an appropriate balance between retaining strong credit metrics, continuing to fund our growth opportunities and returning cash to shareholders.”

Regarding the company’s future strategic direction, Mr Vassella said BlueScope’s strategy and focus on shareholder returns is delivering results.

“In each of the last three consecutive half years, we have delivered over $500 million underlying EBIT. The BlueScope balance sheet is robust, with great flexibility, and we have a clear capital management framework in place,” he remarked.

“BlueScope is very well positioned and we have both an appetite and a capacity for growth. There are many organic growth opportunities across our portfolio of businesses and we place a strong focus on sustainability, innovation and diversity, as we implement our plans.”

“Our financial principles will continue to govern our decision making around capital allocation for growth. We have a talented and diverse team in place to execute the strategy and continue delivering results.”

Image credit: www.bluescope.com

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