BENGALURU- Australian steel maker BlueScope Steel Ltd warned of an earnings slump in fiscal 2025 on Monday, after reporting its lowest underlying profit in four years hurt by weak steel prices and soft construction activity, sending its shares down 5 percent .
BlueScope Steel, which was spun off from BHP in 2002, said it expects underlying operating earnings of between A$350 million and A$420 million in the first half of this fiscal, substantially lower than A$718.4 million a year ago.
That view misses the Visible Alpha consensus of A$503.7 million.
“BlueScope is seeing a convergence of macroeconomic challenges across BlueScope’s largest regions,” the steel manufacturer said in its annual results report.
In Australia, performance was impacted by low Asian steel spreads, driven by high regional steel production and exports, which affected both steel prices and raw material costs.
For the year ended June 30, its underlying post-tax profit dropped 22 percent to A$860.7 million ($574.17 million). That widely missed the Visible Alpha consensus of A$915.9 million and was the lowest since fiscal 2020.
Barring the pandemic year, this was its weakest performance since 2018.
Weak construction activity in BlueScope’s key markets, high raw material costs and strong Chinese exports have pressured steel prices significantly, crimping spreads to their lowest levels since the pandemic.
Shares of the Melbourne-based firm fell as much as 5 percent in early trade to A$19.53, their lowest level in seven weeks.
