AUS
NZ
UK
CA
USA
IND
BlueScope Steel Limited (ASX: BSL) shares are bucking the trend of a market selloff on Friday, trading up 1.1% to $17.94. This rise comes in response to the company's recent market update, which, while not overwhelmingly positive, was better than expected. BlueScope's announcement has sparked a relief rally among investors who may have anticipated a more negative outcome.
According to the company's update, BlueScope now anticipates its underlying earnings before interest and tax (EBIT) for the first half to fall within the range of $620 million to $670 million. This falls short of its prior guidance range of $700 million to $770 million.
The main reason for the lowered outlook is the underperformance of its North Star business, which is expected to deliver roughly half the profit it recorded in the second half of FY 2023. The decrease is primarily due to weaker-than-expected benchmark steel prices and spreads throughout the first half of the year. The company notes that US mini-mill benchmark spreads are projected to be approximately $100/t lower than in the prior half.
On a positive note, BlueScope mentioned that the North Star business is operating at full capacity utilization, and the ongoing expansion project is progressing well.
Despite the challenges in the North Star segment, other reporting segments are expected to perform in line with guidance. This includes BlueScope's Australian business, where lower-than-expected benchmark spreads have been offset by stronger realized pricing and favorable raw materials mix.
Additionally, BlueScope Properties Group, a US-based entity, has experienced delays in a project sale, and it is now anticipated to close during the second half of FY 2024.
BlueScope shares have gained almost 13% over the last 12 months.
