Feb 16 (Reuters) – Australian takeover target BlueScope Steel on Monday forecast higher second-half earnings and reported first-half profit above estimates, helped by stronger U.S. spreads, higher volumes across key markets, and good cost control.
The steelmaker, which had rejected a A$13.2 billion ($9.32 billion) buyout bid from SGH and U.S.-based Steel Dynamics earlier this year, expects second-half underlying earnings before interest and taxes (EBIT) to be between A$620 million and A$700 million ($437.72 million – $494.20 million).
For the six months ended December 31, BlueScope recorded underlying EBIT of A$557.5 million and announced a two-fold jump in underlying net profit after tax (NPAT) to A$382 million, topping a Visible Alpha estimate of A$349.2 million.
This compares to the underlying NPAT of A$176.4 million reported last year.
The group said that it was strongly positioned to generate more cash flows, planning to deliver a total of A$3 per share to shareholders in 2026, including the A$1 per share special dividend announced earlier.
“In the half, all major projects have progressed towards completion, including the EAF at New Zealand Steel…, all of which underpin BlueScope’s operational resilience and growth,” said Managing Director and CEO Tania Archibald.
On top of these measures, the company has simplified its portfolio with the sale of 50% stake in Tata BlueScope Steel and sold a portion of its West Dapto site, setting the stage to increase shareholder returns, Archibald said.
The company declared an interim dividend of 65 Australian cents per share, compared to 30 Australian cents announced last year.
It also announced an on-market buy-back program of A$310 million, in line with its distribution target to return at least 75% of free cash flow to shareholders.
BlueScope shares rose as much as 3.2% to A$30.10 as of 2312 GMT, edging above the A$30-a-share cash offer it had rejected in January as undervalued.
($1 = 1.4164 Australian dollars)
(Reporting by Sneha Kumar in Bengaluru; Editing by Chris Reese, Alistair Bell and Diane Craft)
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