BlueScope left investors disappointed this morning with a 64% lower net profit

Nick Sundich Nick Sundich, February 20, 2023

Of this morning’s 1HY23 results, Bluescope (ASX:BSL) was the one that left investors the most disappointed, if the ~7% share price decline is any guide. The company’s net profit and EBIT both declined by over 60%, missing analysts expectations. 

 

 

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Bluescope’s EBIT and net profit fell by over 60%

1HY23 was a difficult market for steel with weather related disruptions in building and construction activity. 

Although Bluescope’s revenue was only down 1.2% from 12 months ago (at $9.3bn), the company’s EBIT and net profit came in at 60% lower than 12 months ago – at $834.4m and $598.8m respectively. The company’s ROIC also fell from 43.7% to 23.4%. 

On a more positive note, the company’s net cash grew $367m to $606m and its free cash flow (operaitng cash flow less capex) was up $63m to $751m. Its interim dividend was unchanged at 25cps, representing a 2.7% yield on an annualised basis. 

Shares fell by over 7% in this morning’s trade, the most of any company releasing 1HY23 results. 

 

Bluescope (ASX:BSL) share price chart, log scale (Source: TradingView)

 

Bluescope says the long-term outlook remains positive

Despite the negative results, Bluescope told shareholders it was well positioned for the long-term.

The company said the global green revolution was driving demand for steel as a critical input towards particular types of infrastructure, particularly renewable energy and e-commerce infrastructure.

It also noted consolidation and rationalisation in the US steel industry and a focus on emissions reduction by China’s steel industry supported supply-side discipline.

 

Stocks Down Under Concierge gives you timely BUY and SELL alerts on ASX-listed stocks!
 
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