Australia’s biggest steel maker, BlueScope Steel, said higher raw material costs, the strong Aussie dollar and reduced local demand resulted in a loss of $55 million for the first half of the 2011 financial year. This compares with a loss of $28 million for the same time in the previous year.
Speaking at the half-year results briefing in Sydney, BlueScope Steel’s Managing Director and CEO, Mr Paul O’Malley, said the result is ‘in line’ with the Company’s guidance at the Annual General Meeting and reflective of the developed world steel industry performing near the bottom of its cycle.
He emphasized that BlueScope continued its focus on cost reduction explaining that in August 2010 the company reported that it had taken:
- $340 million of permanent costs out of its system since FY2008; and
- $318 million of temporary costs out in respect of FY2010
“These permanent and temporary cost savings have been maintained for the first half FY2011,” he said. “We continue to maintain a strong balance sheet, with:
- Gearing below 15%
- Liquidity of $1,332 million
- Refinanced the loan note facility, extending the tenor and improved pricing,” said Mr O’Malley.
The net loss after tax includes a $77 million write-down of goodwill in the BlueScope Distribution business and a $68 million write-back to the Coated China asset base.
On Friday, Bluescope shares closed Friday at A$2.37, which was up from lows below A$2 in November but off highs above A$3 in April 2010.
