The BlueScope Steel Limited (ASX: BSL) share price went up around 7% after the company revealed a strong update.
BlueScope’s FY21 update
BlueScope said that it had achieved a record second half result, and a preliminary unaudited FY21 underlying EBIT (EBIT explained) of approximately $1.72 billion.
The second half underlying EBIT was previously expected to be approximately $1 billion to $1.08 billion, but it is now expected to be $1.19 billion.
Management comments
BlueScope Managing Director and CEO Mark Vassella said: “This is an outstanding result – our best underlying EBIT performance since demerger in 2002. The business has gone from strength to strength in the second half of FY21 and all operating segments have delivered significantly better results than FY20.
“The results reflect the positive macroeconomic environment with strong demand for our products, and the quality of our diverse portfolio.”
How did the company achieve this?
BlueScope explained that since the 27 April market update, the two most significant contributors to the group’s performance have been: US Midwest benchmark HRC steel prices continued to increase, surpassing prior expectations and favourably impacted realised spreads at its operations at North Star and the North America coated business.
It also said that it has benefited from stronger demand and realised spreads in Australia and New Zealand.
Summary thoughts on BlueScope and the share price
The BlueScope share price and profit is going very well. But it’s hard to know how long these conditions will continue. Steelmaking seems to be a cyclical industry.
There are other ASX growth shares I’m watching that are more consistent with their profit growth.
