- Earnings for BlueScope Steel (BSL) have fallen 70 per cent for the first half of the 2020 Financial Year
- The $185.8 million performance is a major downgrade from the prior period’s $624.3 million earnings achievement
- The company attributed part of the downgrade to a reduction in steel prices
- Hurdles remain, however, as the company’s Chinese division returns to full speed in the wake of coronavirus delays
- The coming months are also expected to hit the company hard as the majority of BlueScope China returns to work
- Shares in BlueScope dropped 7.88 per cent by market close on Monday — last priced at $12.63
Earnings for BlueScope Steel (BSL) have dropped a massive 70 per cent from this time last year — and the company has warned for more difficulty ahead.
The company revealed on Monday that its net profits after tax for the first half of the 2020 Financial Year rounded up at $185.8 million. This is a massive downgrade from the prior period’s performance of $624.3 million.
In a media release to shareholders, BlueScope attributed some of the downgrades to a drop in steel prices, which the company flagged back in August of last year.
However, business ahead looks difficult as BlueScope joins many companies predicting a change in profits from the outbreak of the coronavirus.
“Underlying demand across our major markets is generally stable, however, the economic impact of [the coronavirus] has created uncertainty for our Asian businesses and Asian steel spreads in the near term,” Chief Executive Mark Vasella said.
“We are aware of some impacts to our supply chains which, to date, have been mitigated; we continue to monitor the situation.”
Most of BlueScope’s business in China has ‘returned to normal’, but the existing effects will continue to make an impact this month and next.
Company management says that all sites in China are now operational, except for its Hubei sales office — no cases of coronavirus within the company’s Chinese division have been reported.
“As our BlueScope China businesses and their customer/supplier operations gradually return to normal levels during February, it is expected that February and March business performance will be heavily impacted,” Mark added.
Fortunately for BlueScope, the company reported a ‘favourable turnaround’ in domestic sales during the last business period — a helping hand to mitigate its delayed business in China.
Shares in BlueScope Steel dropped a major 7.88 per cent by the end of market close on Monday — priced at $12.63 each.