Australian steelmaker BlueScope Steel has increased its earnings guidance for the second half of fiscal year 2023 to be in the range of $700 million to $770 million.
This increase is primarily driven by its US-based mill North Star, where the ASX-listed company now expects a result around 50 per cent higher than the first half of the fiscal year.
The new expectation for underlying earnings before interest and tax for the second half of 2023 is a significant increase from the prior range of $480 million to $550 million.
“The improved outlook for 2H FY2023 is pleasing and a credit to the ongoing focus and dedication of our people and the loyalty of our customers,” said Mark Vasella, managing director and CEO of BlueScope.
“Whilst we have been able to benefit from improved prices and spreads, particularly in the US, the improved outlook also demonstrates the strength and resilience of operating a diverse portfolio of high-quality assets,” Vasella added.
North Star’s higher financial results have been driven by stronger-than-expected hot rolled coil prices and spreads, including the benefit of higher spreads on volume from the ongoing ramp-up of the expansion.
BlueScope also attributed the improved outlook to strong selling prices seen by Australian Steel Products, which continues to expect similar domestic despatch volumes compared to the first half of FY2023.
BlueScope’s North America coated products business, which includes Steelscape and ASC Profiles, has favourably impacted realised margins amid higher US steel prices.
The company’s other segments are expected to perform in line with the guidance provided at BlueScope’s 1H FY2023 results realise in February, including the moderate contribution from BlueScope Properties Group on the expected realisation of a project late in the first half.
The new guidance is subject to spread, foreign exchange and market conditions, BlueScope said in its announcement.
The company’s financial results for the year ending 30 June are slated for release on 21 August.
