BlueScope Reports $718M EBITDA and $473M NPAT Despite Margin Squeeze

Financial Performance Overview

BlueScope Steel Limited has released its financial results for the first half of fiscal year 2025, reporting total revenue of $8.59 billion, a modest increase compared to the previous corresponding period. The company’s underlying EBITDA stood at $718.4 million, with an underlying net profit after tax (NPAT) of $473.7 million, reflecting steady profitability despite ongoing market challenges.

Reported EBIT and NPAT were lower than underlying figures due to certain adjustments including business development costs and restructuring expenses, but the underlying results provide a clearer picture of operational performance.

Market Conditions and Operational Highlights

Steel despatch volumes remained stable at approximately 4.23 million tonnes, supported by resilient demand in the housing renovation sector and steady construction activity. However, the company faced significant raw material cost pressures, particularly in coal and iron ore, which compressed steel spreads to cyclical lows. This dynamic was evident in the Australian Steel Products segment, where net spreads softened considerably.

Despite these headwinds, BlueScope’s diversified geographic footprint, including North America, Asia, and New Zealand, helped mitigate risks. The North Star segment in the US, while experiencing spread decreases, continued to generate strong EBITDA and cash flow, maintaining industry-leading margins.

Capital Investment and Sustainability Initiatives

Capital expenditure reached $583.6 million in the half, reflecting BlueScope’s commitment to growth and sustainability. Key projects include the No.6 Blast Furnace reline at Port Kembla Steelworks, upgrades to metal coating lines, and the installation of an electric arc furnace at Glenbrook, New Zealand, aimed at reducing greenhouse gas emissions by over 45%.

The company also advanced its climate action agenda through collaborations on direct reduced iron (DRI) technology pilots and renewable energy initiatives, including a 5MW solar farm in Malaysia. These investments align with BlueScope’s 2050 net zero emissions target and demonstrate a strategic focus on long-term environmental and operational resilience.

Market Outlook and Strategic Positioning

While the broader economic environment remains cautious with slow growth and ongoing price pressures, BlueScope’s exposure to diverse end-use segments such as residential construction, manufacturing, and non-residential infrastructure provides a balanced demand base. The company’s prudent debt maturity profile and liquidity position, including committed facilities and receivables programs, support financial flexibility.

BlueScope’s ongoing cost improvement initiatives and operational efficiencies are critical as it navigates volatile raw material markets and currency fluctuations. The company’s focus on higher value-added products and geographic diversification positions it well to capture opportunities as market conditions evolve.