BlueScope Steel (BSL) H2 2024 earnings summary

Executive summary

• Delivered underlying EBIT of $1.34 billion and ROIC of 11.9% in FY24, reflecting resilience amid volatile macro conditions and lower Asian steel spreads; reported NPAT was $806 million, down year-over-year.

• Strong North Star and downstream/value-add performance offset soft Asian spreads and weaker Australian and New Zealand results.

• Over $548 million returned to shareholders via dividends and buy-backs; net cash balance of $364 million at year-end.

• Board approved a final dividend of 30 cps and extended the buyback program for up to $270 million over 12 months; annual dividend target increased to 60 cps.

• Advanced strategic projects including North Star debottlenecking, US value chain integration, blast furnace reline, MCL7, and NZ EAF; achieved a 12.2% reduction in steelmaking emissions intensity since FY2018.

Financial highlights

• Revenue of $17.1 billion, underlying EBIT of $1.34 billion, and reported NPAT of $806 million, all down from FY2023.

• Free cash flow of $434 million; net cash position of $364 million as of June 30, 2024.

• Underlying EBIT ROIC at 11.9%, with robust contributions from North America and Asia.

• Fully franked final dividend of 30 cps; annual ordinary dividend target increased to 60 cps; buyback program extended for up to $270 million.

• Net working capital at 17.3% of annualised sales; effective underlying tax rate at 24.2%.

Outlook and guidance

• 1H FY2025 underlying EBIT expected between $350 million and $420 million, reflecting ongoing macroeconomic challenges.

• North America result guided to be about half of 2H FY24 due to lower spreads and easing margins; North Star to deliver about one-third of 2H FY24.

• Australia expected to see moderately softer results, with higher costs and similar domestic dispatches.

• Asia expected to improve by ~50% over prior half on seasonality, with China expected to triple; New Zealand and Pacific Islands to nearly double H2 FY24 earnings.

• Focus on cost management and timing of capital expenditure to maintain resilience.