BlueScope Steel Limited (ASX: BSL) announced its results for fiscal year ending 30 June 2018 on 13 August 2018. The company reported 119% increase in Net Profit After Tax to $1.6 billion which includes one-off benefits of $743.1 million. BSL’s Chief Executive Officer, Mark Vassella confirmed underlying EBIT of $745 million in second half of FY2018, up $220.7 million on the first half, which was reportedly driven by strong demand and steel spreads in U.S. and Australasian markets. The 2H underlying EBIT of $745 million reflects strong performance result driven from diversified portfolio including highest growth of 83% to $112 million from New Zealand and Pacific Steel. Mr. Vassella also stated, that underlying EBIT in 2H FY2018 has shown moderately better performances across a number of segments which includes unusual high contribution of $18.3 million from BlueScope Properties Group.
Over last 12 months, company’s earnings increased to $1.5 billion from $1.0 billion of EBIT in previous corresponding year.
In the second half of FY2018, group’s underlying Return on Invested Capital has outperformed first half performance by yielding 22.9% returns to shareholders, up 5.8% from 17.1% in 1H FY2018. This 20% underlying ROIC in FY2018 reports to contribution from different business segments which account to 20%, 24.6%, 24.8%, 13.3%, 19.7%, and 31.6% from BlueScope Steel Group, Australian Steel Products, North Star, Building Products Asia & North America, Building North America, and New Zealand & Pacific Steel, respectively.
The group is generating strong cash earnings as the balance sheet has reached to $63.6 million net cash position at 30 June 2018, stated Mr. Vassella.
Based on the solid FY18 results, the Board has declared the final dividend of 8 cents per share, fully unfranked, and larger on-market share buy-back of $250 million which is scheduled for completion in first half of FY19.
The company expects first half year FY2019 underlying EBIT to be around 10% higher than $745 million in 2H FY2018. It also anticipates downward shift in underlying finance cost and tax rate for 1H FY19, thus, expected to increase bottom line of the group. After slipping by 1.455% to $17.610 ahead of results announcement on 13 August 2018, the BSL’s stock edged up by 0.88% to $17.765 on 14 August 2018, 1:15 PM AEST.
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