CEO Mark Vassella warned of uncertainty on a $1b plant upgrade at Port Kembla because of the Fed Govt’s safeguard mechanism.
The chief executive of steelmaker BlueScope says customers are cutting back on orders in a more difficult economy, but there’s been no “dramatic” fall-off after nine successiveThere was a big slide in the group’s share price in early trading on the ASX as investors factored in a weaker outlook than expected, with the stock tumbling 11 per cent to $17.62 by 10.30am AEST. BlueScope shares were at $22.25 in late April last year.
“At this stage we are not seeing any dramatic impact,” he said. The level of housing starts for detached dwellings was now shifting back to long-term historical averages after a spike because of low rates and“People still have their job and are being paid well”. BlueScope’s best known product is ColorBond steel, using in roofing, while its products are also used in steel frames for houses and industrial construction.
Mr Vassella said earnings before interest and tax for the June half was likely to be between $480 million to $550 million, signalling the halcyon days of the record annual profits achieved in 2021-22 were over, with peak profits having passed in this cycle. He said BlueScope would be making a submission to the national government as part of the safeguard mechanism process machinations. Mr Vassella said it wouldn’t be very sensible if the scheme was so punishing that it threatened the viability of a blast furnace reline that put Port Kembla in the lowest quartile of steel producer’s carbon emissions globally.
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