BLUESCOPE CONTINUES STRONG RUN WITH GUIDANCE UPGRADE
24 January 2017, Written by Business News Australia
BLUESCOPE Steel (ASX: BSL) is trading up 7.51 per cent at $11.16 per share after upgrading its half-year guidance this morning.
The company expects its underlying earnings before interest and taxt (EBIT) for the six months ended 31 December 2016 to be around $600 million, compared with prior guidance of $510 million.
The company puts this 160 per cent growth on earnings compared to the first half of FY16 down to three main points:
The company says its North American operations benefited from higher steel prices and margins, while its India business saw positive earnings growth with higher margins and volumes.
The company's debt is expected to be around $530 million, a multiple of 0.4 times underlying EBITDA, in the 12 months ended 31 December 2016.
Bluescope is expecting to take a $65 million impairment in the half year after reconfiguring its China buildings business, investing in capital expenditure at its Tahora export iron sands business, and restructuring of the India engineered buildings business.
The Melbourne-based company has enjoyed a strong run since around October 2015, when it made 500 staff redundant and renegotiated its EBA with staff at its Port Kembla steelworks and finalised the purchase of the North Star steelworks in the United States.
The company is trading well above its 12-month low of $4.16 after a succession of earnings upgrades over the past 18 months.
Author: Business News Australia