BlueScope Steel Limited

BSL Details

In May 2017, BlueScope has sold its 100% shareholding in Taharoa export iron sands business to Taharoa Mining Investments Limited (TMIL), a majority owned subsidiary of Taharoa C Block Incorporation (Taharoa C). Importantly, BlueScope’s sale of the Taharoa export iron sands business simplifies the company’s portfolio and is consistent with the implementation of its strategy to focus on growing premium branded steel businesses, delivering competitive commodity steel supply in local markets and maintaining a strong balance sheet. Further, BlueScope will make a cash contribution of approximately NZ$51m and TMIL will assume all liabilities associated with the business including NZ$76.5m in finance lease liabilities. The company expects H2FY2017 underlying EBIT to be 50% higher than H2FY2016 (which was $340.3M), while underlying net finance costs to be lower than 1H FY2017 due to lower average net debt. However, it expects slightly higher underlying tax rate due to regional mix of earnings, and similar profit attributable to non-controlling interests to H1FY2017. The stock has moved up more than 70% in the past one year as on 27 July 2017, and currently trading at elevated levels. We give a “Sell” recommendation at the current price of $13.14


BSL Daily chart; (Source: Thomson Reuters)

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