Australian steelmaker BlueScope Steel has posted a net profit of A$185.8 million for the first half ended on December 31 of the financial year 2019-20, decreasing by 70 percent compared to the net profit of A$624.3 million in the same period of the previous financial year, by reason of a lower EBIT.
BlueScope's sales revenues decreased by eight percent year on year to A$5.86 billion, due to decreasing steel and export coke selling prices partially offset by the favourable translation impacts from a weaker Australian dollar exchange rate.
In the given period, BlueScope’s underlying EBIT declined by 64 percent year on year to A$302.4 million, in consequence of lower spreads between selling prices and higher costs.
According to BlueScope, BlueScope China businesses and their customer/supplier operations have gradually returned to normal levels during February, while it is expected that the February and March business performance will be heavily impacted. Managing director and CEO Mark Royce Vassella said, “Underlying demand across our major markets is generally stable: however, the economic impact of COVID-19 has created uncertainty for our Asian businesses and Asian steel spreads in the near term. The impact to US Midwest spreads, if any, is unclear. We are aware of some impacts to our supply chains which, to date, have been mitigated; we continue to monitor the situation.”
In the second half of the financial year 2019-20, the company expects underlying EBIT to be similar to the first half of the financial year 2019-20, subject to the probable market effect of the corona virus.