BlueScope Steel

Robust Performance in FY18: In FY2018, BlueScope Steel Limited (ASX: BSL) recorded the net profit post tax amounting to $1569.1 million which is inclusive of the non-recurring benefits amounting to $743.1 million. According to the company’s top management, its focus related to the shareholders’ returns is the primary reason which is helping the company in strong performance. The management has stated that it enjoys strong balance sheet and the capital management framework is in line. As at 30 June 2018, the company had net cash of 64 Mn.
 

FY18 Financial Highlights (Source: Company Reports)

On the other hand, the group has updated the market about the progress on several transactions under its ongoing buy-back event. The group intends to buy back shares with an aggregate total consideration of up to $250 Mn. As of now, the group has bought back a total of 96,89,220 shares via on-market trade for the total consideration of A$ 16,47,15,962.60. Moving forward, the company expects to reap the benefits from the organic growth opportunities. The management plans to stay determined towards diversity, innovation as well as sustainability in plan implementation. For 1H of FY 2019, the company has forecasted its earnings before interest and tax or EBIT of approximately 10% higher as compared to the 2H of FY 2018. Meanwhile, the stock has generated a negative YTD return of 6.37% and traded at a level close to 52-week higher level. In the last three months, the stock has fallen by about 11.90% and the volatile trend is continuing. Given the backdrop of mix scenario, we have a wait and watch view on the stock at the current market price of $15.860, as we await further growth catalysts that can mitigate the prevailing volatility while steel demand looks robust going forward despite US China trade war fears that have already led to a bottom out in the base metals.
 
 

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