BlueScope sees net profit falls in FY2023; announces Port Kembla furnace relining and upgrade

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Image credit: BlueScope

BlueScope has made a $1.15 billion investment in the relining and upgrade of the No.6 Blast Furnace (6BF) Port Kembla Steelworks and announced a dip in profit in fiscal year 2023. 

The ASX company posted a net profit after tax of $1.01 billion for FY2023, marking a $1.8 billion slip from the record result achieved in the previous year. 

Mark Vassella, managing director and CEO of BlueScope, said the company’s underlying EBIT for the financial year remained strong at $1.61 billion, reflecting the resilience of the business model, particularly in terms of macroeconomic and industry cycles. 

The company’s balance sheet also remains strong with $703 million in net cash, positioning BlueScope well amid a period of increased capital spending on projects focused on sustainable earnings and growth. 

Operating cash flow for the half year stood at $1.34 billion after capital expenditure. 

“In FY2023, BlueScope delivered $518 million in shareholder returns through dividends and on-market buy-backs. Today, the Board has approved a fully franked final dividend of 25 cents per share, and an increase to the share buy-back program, to allow up to $400 million to be bought over the next 12 months,” Vassella said. 

The furnace relining and upgrade in Port Kembla comes as the facility approaches its 100-year anniversary and looks into options to decarbonise its operations and realise its vision of low-emissions iron and steelmaking in Australia. 

The relining and upgrade project will serve as the company’s “bridge to the future” and will be a critical part of maintaining the sovereign capability of flat steelmaking in Australia by enabling BlueScope to develop, test, and pilot alternative viable lower emissions iron-making pathways. 

The 6BF is expected to be commissioned in mid to late 2026. 

Vassella also highlighted BlueScope’s latest progress in its growth ambitions, citing two strategic acquisitions and the expansion of the company’s North Star mini-mill in the US, completed in the last two years. 

“In Australia, work has commenced on a new metal coating line in Western Sydney to meet future demand for our value-added products – the demand for which continues to grow, evidenced by a record level of COLORBOND steel sales in FY2023,” he added.