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BlueScope's FY'19 profit down 35%; sets US$700M investment in Ohio steel mill

BlueScope Steel Ltd. said Aug. 19 that fiscal 2019 net profit sagged 35% to A$1.02 billion, or A$1.90 per share, from A$1.57 billion, or A$2.82 per share, a year ago.

Shares in the Australian steel major dipped about 9% in mid-day trading on the ASX the same day.

The loss resulted from unbooked tax losses and U.S. tax reform in its fiscal 2018, impairments at its Thailand building products segment and higher restructuring costs in its fiscal 2019. Further, some softening in commodity steel spreads and domestic volumes in the second half also affected profit.

Despite the earnings drop, the steelmaker declared a final unfranked dividend of 8 cents per share, in line with its dividend in the prior year, as well as an on-market share buyback of A$250 million, to be held in the first half of its fiscal 2020.

A 6% increase in underlying EBIT to A$1.35 billion, as well as lower financing costs and outside equity interest pushed BlueScope's underlying profit for the period up 17% to A$966.3 million.

Higher steel prices across all segments, as well as a favorable Australian dollar exchange rate, positively influenced revenue for the period, which grew 9% to A$12.53 billion.

Net cash as of June 30 ballooned to A$692.7 million, a 989% upward change from A$63.6 million in the prior year.

Meanwhile, BlueScope approved a US$700 million investment to add 850,000-tonnes-per-annum of capacity at the North Star BlueScope Steel LLC steel mill in Ohio. Commissioning is targeted in the middle of fiscal 2022, with full ramp-up expected about 18 months later.