Australian company BlueScope Steel’s Hot Rolled Products North America segment turned in strong operating results for the second half FY 2016, ending June 30, 2016. Second half EBITDA was AUD$132.5 million (US$ 101 million). Second half revenue for the segment, which included a 47 percent share of Castrip LLC and 100 percent of North Star BlueScope, totaled AUD$660.2 million ($503.6 million). North Star BlueScope Steel shipped 1,022,000 tonnes compared to 999,000 tonnes in the first half. North Star production in the second half was 1,039,000 tonnes.
North Star BlueScope operated at 100 percent capacity in the second half compared to the U.S. industry average of below 70 percent. Steel spreads strengthened significantly going into FY 2017. A fire at North Star in May cost the company approximately US$5 million. Operations were fully restored at the mill in nine days.
At the end of October, BlueScope Steel acquired the remaining 50 percent share of North Star BlueScope which contributed to stronger earnings for the company as a whole. The acquisition, a favorable AUD exchange rate and stronger domestic demand drove BlueScope Steel profits for FY 2016 up 119 percent, with underlying net profit after tax (NPAT) $293.1 (US$223.5 million) compared to $134.1 million (US$102.3 million) in FY 2015. Sales for the year totaled AUD$9,182.7 million compared to AUD$8,571.7 in FY 2015.
In its outlook remarks BlueScope Steel said it expects U.S. mini mill spreads in in the last three months of 2016 to fall 10-20 percent from current spot prices of US$360-$380 per ton. North Star BlueScope is expected to continue to operate at full capacity.
Previously BlueScope reported results on the Hot Rolled Products North America segment, but with the sale of Castrip LLC in July 2016 to Nucor and full ownership of North Star, the segment will be known as North Star BlueScope Steel going forward.
(1 AUD $ = .75 US $).
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