BlueScope Steel has lifted its underlying profit and expects higher profit margins to provide a further boost to its earnings.
The steel maker made an underlying profit of $112.3 million for the year to June 30, up from $6.7 million a year ago, thanks to higher margins and sales volumes.
But the company reported a net loss of $82.4 million, after higher restructuring costs offset the improved earnings.
However, that result was still an improvement on the $107.1 million loss the company suffered a year ago.
BlueScope spent more than $55 million on restructuring costs during the year and also made writedowns of $87.6 million to its Australian operations.
But earnings from the Australian business more than tripled due to increased volumes and higher margins, while earnings from the New Zealand business more than doubled.
Earnings from Asia and North America were up 12 per cent, but the company’s building components and distribution business made an underlying loss of $22.8 million amid difficult conditions.
The company expects conditions during the first half to 2015 to be similar to the second half of 2014.
“Conditions in building construction markets of our key global regions are positive,” the company said in a statement.
“We expect the first half of 2015 will benefit from expanding domestic margins; contributions from recent acquisitions; our restructuring in China; and growth and typical seasonality in North America.
“Offsetting factors include lower iron ore prices reducing New Zealand iron sands revenue; the unresolved political situation in Thailand and normalisation of the underlying tax rate.”
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BlueScope did not pay a dividend but chairman Graham Kraehe said the company’s improved performance brought it closer to being able to pay a distribution to shareholders in the future.
“The board is pleased with the company’s continued turnaround and progress on growth initiatives where we have actively invested to lower our cost base, to better serve customers and to grow our iron sands exports,” he said.
“These actions have laid a solid foundation for a future return to paying dividends.”
BlueScope’s shares had sunk by 83.5 cents, or 13.7 per cent, to $5.265 by 1330 AEST.
