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BlueScope Steel raises H1'17 earnings expectations

BlueScope Steel Ltd. now estimates its preliminary unaudited underlying EBIT for the first half of the 2017 financial year will be about A$600 million compared to its prior guidance of A$510 million.

The company said Jan. 24 that the increase represents growth of about 160% on the first half of the 2016 financial year.

The higher earnings estimate is largely due to stronger-than-expected steel and iron ore prices as well as productivity improvements, including further cost reductions, in BlueScope's Australian Steel Products, North Star BlueScope Steel and New Zealand and Pacific Steel segments.

The building products segment also witnessed a strong half, particularly in the North American business which benefited from higher steel prices and margins, while the Indian business saw positive earnings growth with higher margins and volumes.

Additionally, BlueScope estimates it will book a A$65 million impairment related to its China buildings business, where manufacturing sites are being reconfigured or closed to further lower the cost base, CapEx at its Taharoa export iron sands business and the restructuring of its Indian engineered buildings business.