Underlying EBIT (earnings before interest and tax) for the year was $564 million, down 58 per cent on last year’s $1.35 billion result, but in line with BlueScope’s latest guidance released a month ago.
BlueScope chief executive Mark Vassella said the $564 million of EBIT was a strong result in the context of the COVID-19 pandemic, which caused the shutdown of major US carmakers for two months, and the weaker steel market during the year.
“While no one knows how this pandemic will play out, BlueScope has shown once again the resilience in its earnings, the quality of its cash flow and the strength of the balance sheet,” he said.
“We believe we are well-positioned to address likely post-COVID emerging societal trends, such as a shift in preferences towards lower-density suburban and regional/rural residential housing demand, a rise in home improvements and extensions activity,” he said.
The $197 million write-down of BlueScope’s New Zealand and Pacific Islands business, flagged last month, is in response to expectations of weaker future earnings. The company has flagged significant redundancies in this division as it strives to save costs, and said it could cease making steel in New Zealand and instead shift to the external supply of steel products.
Given the great uncertainty created by COVID-19 the steelmaker said it would not provide EBIT guidance for the first half of the new financial year.
Shares in BlueScope were down 2.5 per cent on Friday to $12.07.
More to come