bluescope flags small full-year loss

July 16, 2009 - 2:29PM
BlueScope Steel Ltd says it expects to post a small loss for the financial year just ended due to a weaker steel market.

However, the nation's biggest steel maker also said that it would restart its No.5 blast furnace at its Port Kembla steelworks in New South Wales next month in light of a modest improvement in the market in May and June.

"The company will record a small reported net loss after tax for FY2009, with second half losses offsetting the previously disclosed first half profit," Australia's largest steel maker said in a statement on Thursday.

BlueScope did not elaborate further with an expected figure for the loss.

BlueScope's net profit for the year ended June 30, 2008 was down 13 per cent at $596 million after it booked a one-off $225 million impairment charge for its China and Vietnam coating facilities.

The company said in a statement on Thursday that "the positive impacts of rising export prices and reduced inventory volumes have been offset by weaker domestic product pricing in Australia and North America".

It also said the stronger Australian dollar and higher scrap costs at NorthStar BlueScope Steel in the US would affect earnings as would increased restructuring and redundancy costs.

BlueScope said it decided to restart its No.5 blast furnace in light of an improvement in Australian domestic market volumes in May and June, de-stocking in global steel markets and a recent increase in international hot rolled coil prices.

All major elements of a $372 million reline of the blast furnace, other than hot commissioning, had been completed, it said.

The comprehensive overhaul that has brought the furnace to peak operating condition was announced in late May.

BlueScope said a sinter plant upgrade, undertaken in conjunction with the reline, was progressing well.

"Production recommenced at the end of June and the (sinter) plant will be brought up to a rate consistent with the requirements for the blast furnace operations over the coming months," it said.

Shares in BlueScope were up 20 cents at $2.78 at 1545 AEST on Thursday.