BlueScope Posts $738M EBIT, Eyes Stronger FY2026 Despite Market Headwinds
BlueScope Steel reported a resilient FY2025 with $738 million underlying EBIT despite soft market conditions, advancing key growth and decarbonisation initiatives. The company extends its buy-back program and maintains a strong balance sheet as it targets significant earnings uplift by 2030.
- FY2025 underlying EBIT of $738M, down from FY2024 amid cyclically soft steel spreads
- Delivered $293M in shareholder returns with net debt of $28M and 30 cents per share final dividend
- Achieved $130M in cost and productivity improvements, progressing $500M incremental EBIT growth projects
- Ongoing climate action with emissions reductions and NeoSmelt pilot plant development
- Mixed regional performance – North America stronger, Asia steady, New Zealand softer
Navigating a Challenging Market
BlueScope Steel Limited has released its FY2025 financial results, revealing a company that remains resilient despite a backdrop of global uncertainty and cyclically soft steel spreads. The company reported an underlying EBIT of $738 million, down $601 million from the previous year, reflecting the tough operating environment. Return on invested capital (ROIC) also declined to 6.2% from 11.9% in FY2024, underscoring the impact of subdued market conditions.
Despite these headwinds, BlueScope maintained a robust balance sheet with net debt of just $28 million and returned $293 million to shareholders through dividends and share buy-backs. The final dividend was set at 30 cents per share, 50% franked, and the company extended its current buy-back program by up to $240 million over the next 12 months, signaling confidence in its capital management strategy.
Executing the Transform, Grow, Deliver Strategy
BlueScope’s strategic focus remains firmly on its 'Transform, Grow, Deliver' agenda. The company achieved $130 million in net cost and productivity improvements during FY2025, driven by initiatives across manufacturing overhead, raw materials, and freight. These efforts are part of a broader program targeting $200 million in annual savings by FY2026.
Growth initiatives are also progressing well, with projects aimed at delivering an incremental $500 million EBIT uplift by 2030. Key among these is the North Star debottlenecking project in North America, expected to add 300,000 tonnes of capacity by FY2028, alongside expansions in Australian value-added products such as COLORBOND® and TRUECORE® steel. BlueScope is also actively realising value from its strategic land portfolio, including near-term opportunities at West Dapto, NSW.
Climate Action and Safety Commitments
BlueScope continues to embed sustainability into its operations, reporting a 14% reduction in steelmaking emissions intensity since FY2018. The company is advancing innovative decarbonisation projects, notably the NeoSmelt pilot plant in Kwinana, WA, which uses Direct Reduced Iron technology and is supported by partners including Mitsui Iron Ore Development and Woodside Energy.
On safety, BlueScope’s global 'Refocus on Safety' program is well embedded, though the company acknowledges the occurrence of life-changing injuries during the year. It remains committed to strengthening controls and improving incident management to protect its workforce.
Regional Performance and Outlook
Regionally, North America showed strength with improved spreads and volumes, particularly at the North Star facility, which posted an EBIT of $267 million. The Buildings & Coated Products segment faced challenges, including a $439 million impairment charge due to integration delays and operational inefficiencies, but remains a strategic growth platform.
Asia delivered mixed results, with Southeast Asia and India showing improvement, while China experienced softness. New Zealand’s performance was weaker, impacted by soft macroeconomic conditions and higher energy costs.
Looking ahead to the first half of FY2026, BlueScope expects underlying EBIT between $550 million and $620 million. The company anticipates moderate improvements in Australian domestic demand, a stronger North American result, and a return to breakeven in New Zealand, while remaining cautious about macroeconomic uncertainties and commodity price volatility.
Disciplined Capital Allocation
BlueScope’s capital allocation remains disciplined, balancing investment in growth, climate initiatives, and shareholder returns. The company plans capital expenditure of approximately $720 million in FY2026, including sustaining, foundation, growth, and climate-related projects such as the MCL7 expansion and the electric arc furnace installation at NZ Steel.
Since FY2017, BlueScope has returned over $3.8 billion to shareholders through dividends and buy-backs, reflecting a strong commitment to delivering shareholder value alongside long-term strategic growth.
Bottom Line?
BlueScope’s FY2025 results underscore resilience amid market softness, setting the stage for growth and decarbonisation efforts that will define its next decade.
Questions in the middle?
- How will BlueScope manage the integration and turnaround of its North American Buildings & Coated Products segment?
- What impact will commodity price volatility and foreign exchange fluctuations have on BlueScope’s FY2026 earnings?
- How quickly can BlueScope scale its NeoSmelt and other decarbonisation technologies to meet its 2030 emissions targets?
