BlueScope, the owner of the Port Kembla steelworks, announced a net profit of $390.8 million for the first half of the 2025/26 financial year, marking a significant increase of 118 percent compared to $179.1 million during the same period last year. This impressive performance was bolstered by a 4 percent rise in sales revenue, reaching $8.2 billion. The company also projected an 81 percent increase in underlying earnings before interest and tax, amounting to $557.5 million.
Despite these strong financial results, BlueScope’s shares fell by 2.7 percent on Monday, closing at $28.37. This decline occurred even after the new Chief Executive Officer, Tania Archibald, announced plans to enhance shareholder returns. In her first presentation of results since taking over, Archibald revealed that BlueScope intends to increase its shareholder distribution target, aiming to return 75 percent of free cash flow, up from the previous target of 50 percent.
Investment Strategy and Future Outlook
Archibald explained that the company is nearing the completion of a significant capital project pipeline. “We can see the back end of that unusually large and long-term capital program starting to ramp down,” she stated, adding that as spending decreases, returns to shareholders will increase. The CEO emphasized the importance of this shift as a part of her transition into the role.
Acknowledging the previous leadership of Mark Vassella, Archibald credited his investments in capacity expansion as fundamental to the potential for increased shareholder distributions. “Clearly, what we’re trying to signal here is that we want to place more value into the hands of our shareholders. Our shareholders have been very patient for a long period of time as we’ve undertaken these very significant investments,” she remarked.
BlueScope’s shares have recently reached their lowest level since the $13.2 billion takeover proposal from the Stokes family-controlled SGH and Steel Dynamics was first disclosed in early January. At that time, the proposal valued shares at $30 each, although it was later indicated that the offer had effectively declined to $29 per share following BlueScope’s announcement of a $438 million return to shareholders.
Ryan Stokes, CEO of SGH, has expressed that the proposal remains full and fair but is prepared to move on if BlueScope shareholders do not share the same view.
BlueScope also provided a forecast for the second half of the financial year, estimating underlying earnings before interest and tax to be between $620 million and $700 million, reflecting an anticipated improvement over the first half. Analyst Owen Birrell from RBC Capital Markets described the results as solid, noting that the interim dividend exceeded consensus expectations.
In addition to its operations at the Port Kembla steelworks in New South Wales, BlueScope also runs the North Star operation in Ohio, which produces hot-rolled steel from scrap at competitive costs. The company maintains a diverse asset portfolio that includes operations in New Zealand and Asia, positioning itself for sustained growth in the steel market.
