News: UPDATE 1-Bluescope's new CEO faces weaker earnings as energy costs bite

(Adds CEO comments, share price drop)

MELBOURNE, Aug 21 (Reuters) - Australia's Bluescope Steel (BSL) warned on Monday of a steep drop in earnings in the current half due to import competition and soaring energy costs, sending its shares down by more than 20 percent.

Australia's biggest steel manufacturer also cited weaker margins from its operations in the United States for the fall.

Bluescope's stock was down 21.7 percent at A$11.04 a share by 0122 GMT, despite Chief Executive Paul O'Malley telling an analysts' call that the company was addressing the "macro headwinds" affecting the company.

"We are on a path to fix that," O'Malley said. At the same time, O'Malley said he would retire in December after 10 years in the job. He will be succeeded by the head of the company's Australian arm Mark Vassella.

Underlying earnings were set to drop 20 percent in the current half from the second half of the 2017 financial year to around A$422 million ($334 million), implying a 30 percent drop from a year earlier, according to the company.

"A sharp increase in energy costs for our Australian operations risks undermining recent cost and productivity improvements," O'Malley said.

Combined gas and power costs for the company's three main steel mills are expected to soar 75 percent in 2018 from levels two years ago to A$145 million.

"We need more gas, preferably at lower prices," O'Malley said.

"We are very concerned about tightening of supply in the gas and electricity markets, and have highlighted our concerns to government and regulators," O'Malley said.

Underlying profit rose 112 percent to A$650.8 million for the year to June 2017, based mainly on cost-cutting. However the result was below market forecasts of A$682 million, according to Thomson Reuters I/B/E/S.

The final dividend of 5 cents a share was also below market forecasts for 7 cents.

Bluescope said it would still return a further A$150 million to shareholders through an on-market share buyback. ($1 = 1.2617 Australian dollars)