The BlueScope Steel Limited (ASX: BSL) share price is up more than 2% after the steel manufacturing company announced that its profit had more than doubled in the FY21 result.
BlueScope was positive about the current operating environment despite COVID-19. Here are some of the highlights from the report if you didn't catch it earlier:
BlueScope's FY21 half-year result
The company said that its net profit after tax (NPAT) grew by 78% to $330.3 million. BlueScope reported that its underlying net profit after tax was $332.8 million.
Underlying earnings before interest and tax (EBIT) for the half-year was $530.6 million, up 75% compared to the prior corresponding period.
BlueScope said that it has seen strong volume and improving steel spreads in the largest steelmaking business in Australia and the US. Australian steel products domestic despatches were the highest in a decade, driven by a resurgent residential construction sector.
The Australian steel products division delivered underlying EBIT of $259.1 million, up 103% compared to the prior corresponding period. There has been particularly strong demand for coated and painted products, leading to the strongest domestic volumes since 2010.
BlueScope's building products division for Asia and North America generated underlying EBIT of $150.3 million, up 87% year on year. The North America business improved significantly, due to improved manufacturing performance and cyclical margin expansion. The building North America business saw 189% growth of underlying EBIT to $70.5 million.
North Star
BlueScope currently has a plan to expand its North Star mini-mill in Delta, Ohio, by around 850,000 tonnes per annum.
The company said that over the last six months, work has commenced work on installing the melt shop, caster and shuttle furnace. Equipment continues to be delivered to site, with ancillary equipment such as cranes, water and electricity also being installed.
Capital management
BlueScope said that its buy-back programme will remain on hold whilst it's focusing on investing on the North Star expansion and there is ongoing uncertainty in market conditions.
However, the board did approve the payment of a 6 cent per share interim unfranked dividend.
Outlook for the second half of FY21
The company said that at the beginning of the second half, its order and despatch rates in key markets remain robust. Spot steel spreads in North America are materially higher than both the first half longer-term averages.
However, it is uncertain whether these conditions will continue throughout the half due to market factors.
BlueScope is expecting underlying EBIT in the second half of FY21 to be in the range of $750 million to $830 million.
