BlueScope Steel shares up after profit guidance lifted
03:17, 21 October 2021
Shares in BlueScope Steel jumped on Thursday after the company raised its profit outlook for the July-December period.
The Australian steelmaker now expects earnings before interest and taxes to be between AUD2.1bn ($1.6bn) and AUD2.3bn during July-December 2021, higher than a prior guidance of AUD1.8bn-AUD2bn due to rising prices and demand as China, the world’s biggest steel producer, curbs output.
BlueScope shares rose as high as 3.1% to AUD20.84 intraday on the Australian bourse. Post midday in Sydney, the shares exchanged hands at AUD20.62, up 2.4% from Wednesday’s close.
Higher prices in US, strong Australian demand
The improved outlook comes on the back of stronger-than-expected hot-rolled coil prices at BlueScope’s North Star mini-mill in the US as well as strong demand for its coated products there. Robust demand from the building and construction sector in its home market is also pushing up margins.
“The performance continues to demonstrate the value of our business model, and further underpins our capacity to invest for long-term sustainable earnings and growth, to position the business for a low carbon future and to deliver solid returns to shareholders,” BlueScope managing director and CEO Mark Vassella said in an exchange filing.
The company will provide more details at its annual general meeting on 18 November.
BlueScope shares have been falling this week, going from AUD20.97 last Friday to AUD20.01 on Tuesday. The guidance on Thursday and increase in its share price helped limit the week’s fall to just 1.7%.