By Rhiannon Hoyle
Australian BlueScope Steel Ltd. improved its profit forecast for the first half of the year, citing strong demand and prices for its steel, particularly in the United States
The company said Thursday it now expects underlying profit before interest and taxes to be between A $ 2.1 billion ($ 1.6 billion) and A $ 2.3 billion. for the six months until December. BlueScope had previously forecast an Ebit of A $ 1.8 billion to A $ 2.0 billion.
“The company continues to benefit from strong spreads, prices and demand,” said Managing Director Mark Vassella. Spreads measure the difference between the price of raw materials and the price of finished steel.
BlueScope has seen an increase in profits due to the rise in steel prices which has resulted in repeated increases in profits in recent years and allowed it to increase dividends paid to shareholders.
The company said the main reasons for its latest profit improvement are higher than expected hot-rolled coil prices and spreads in the United States, where it operates the North Star mini-plant. This was partly offset by higher alloy and conversion costs, including labor, BlueScope said.
The company said its coated products business in North America was also benefiting from high steel prices and continued strong demand, while its Australian steel products business saw a further increase in domestic volumes, particularly in products with higher added value for the building and construction sector.
Write to Rhiannon Hoyle at [email protected]