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BlueScope (ASX:BSL) share price slides on results

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The BlueScope Steel Limited (ASX: BSL) share price is edging lower this morning following the release of its first-half results for FY21. At the time of writing, the steel producer’s shares have backtracked 2.78% to $16.80.

Let’s take a look and see how the company performed for the period.

What are the highlights?

The BlueScope share price is coming under pressure today despite reporting a positive set of numbers.

In this morning’s release, BlueScope advised it achieved a solid performance across its key business metrics.

For the six months ending 31 December, BlueScope delivered total sales revenue of $5,817.4 million, down 1% on the first half of FY20. The slight fall was attributed to lower selling prices caused by unfavourable currency exchange movements in the Australian dollar despite improved demand.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) came to $772.5 million, up 75% on the prior corresponding period. Stronger steel spreads such as reduced raw material costs and a lift in volumes from demand supported its operating profitability. The company’s largest steelmaking business in Australia and the United States particularly saw strong recovery rates.

Underlying net profit after tax (NPAT) grew to $332.8 million, increasing 67% over this time last year.

After capital expenditure, total group cash flow stood at $265.1 million, a jump of $305 million from H1 FY20.

BlueScope closed the first half with a net cash position of $305.1 million. Previously, the group recorded net cash of $79 million at the end of June last year.

The board declared an unfranked interim dividend of 6 cents per share to be paid to shareholders on 30 March 2021. This is the same amount as management handed out to shareholders in the H1 FY20 period.

Outlook

Looking ahead, BlueScope noted that order and dispatch rates in its key markets remain healthy. Spot steel spreads in North America are forecast to be materially higher than H1 FY21 and longer-term averages. However, due to COVID-19 uncertainty, the business cautioned that the favourable trading conditions might not be sustained.

As a result, BlueScope predicts that underlying EBIT will be in the range of $750 million and $830 million. This will be dependent upon future spread, foreign exchange and market conditions.

About the BlueScope share price

Over the last 12 months, the company’s shares have risen to more than 26%, reflecting a recovery in the sector.

During March, BlueScope shares fell to a low of $8.03 before gradually moving along an upwards trend. The company achieved a 52-week high of $18.80 just last month.

Based on the current share price, the company has a market capitalisation of $8.7 billion.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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