BlueScope Steel posts net loss of $66m

BlueScope Steel has reported an annual loss of $66 million in the past financial year in what the steelmaker described as the most challenging 12 months in its history.The after-tax net loss for the year ended June 30 compared to a profit of $596 million in the previous year.BlueScope, Australia’s largest steelmaker, said while it had recently seen some improvement in demand in its markets, the company remained cautious and expected to report a further loss in the first half of 2009-10.The past year was marked by heavy falls in export demand, sales and prices. SLIDESHOW: BlueSCope No 5 blast furnace reline”We are encouraged by the improvement in demand in some markets, and by movement in steel prices globally,” chief executive Paul O’Malley said.”However, the improvement in demand is coming off a low base and we remain cautious on the outlook and are currently expecting to deliver a small reported net loss after tax in the first half of financial year 2010.”Mr O’Malley also warned over Australia’s plan to cut carbon emissions, which he said would damage the competitiveness of the Port Kembla Steelworks.”(BlueScope) strongly believes that the cumulative net cost impact of the current design of the proposed Carbon Pollution Reduction Scheme (CPRS) would be highly significant and material, and that it would severely damage our competitiveness, putting domestic investment, Australian jobs and the Australian steel industry at high risk,” he said.”Importantly, the CPRS undermines Port Kembla Steelworks current world class competitiveness. It risks the viability of these long-term manufacturing assets. Its a direct threat to this NSW regional economy and the 12,000 workers and their families who rely on the steelworks, and more than 1000 employees and contractors and their families at Western Port in Victoria.”Mr O’Malley said the group was yet to see the full flow-on effect of various government stimulus packages, especially in the United States and Australia.”We are seeing the benefits of China’s economic stimulus package,” he said.”And we have an increasingly positive view of our prime market, Australia.”As foreshadowed, BlueScope did not declare a final dividend. It had paid a final dividend of 27 cents in the previous corresponding period.Revenue for the year was $10.33 billion, down 1.6 per cent.Its annual underlying net profit after tax was $56 million, down 93 per cent on the previous year.”This was the most challenging year that BlueScope Steel has faced,” Mr O’Malley said.For full coverage see Tuesday’s Mercury.
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