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ABC News
a day ago
- Business
- ABC News
More than 30 potential buyers for the Whyalla steelworks, SA Premier says
There are "at least 33 interested parties" to acquire the Whyalla steelworks, with a majority of them based overseas, SA Premier Peter Malinauskas says. Four months after tipping the steelworks into administration and removing GFG Alliance as its owners, the state government on Tuesday announced that a secure data room has been set up for prospective buyers to conduct due diligence on purchasing the steelworks and its associated mines. Steelworks administrators KordaMentha has previously said that there were up to 12 "interested parties" in the steelworks, but the Premier today revised that number up to "at least 33". Mr Malinauskas said more than 60 per cent of the prospective buyers were from overseas, including "very significant global steelmakers with names that are synonymous with serious investment in the industry". "If you had said to me back in February — when we made that major intervention to remove GFG and put the steelworks on the path to new ownership — that we'd be in the position that we are in now, I would have taken it in a second," he said. "We, of course, have got a long way to go before we are able to sell the steelworks to new ownership and set it up for the future. Mr Malinauskas did not name the global companies involved, but said the interest parties were from India, Japan and Korea. Australian company BlueScope Steel had also previously been linked to a potential takeover, with KordaMentha tapping the firm as a steelmaking adviser during the administration. South Korean steel giant POSCO has also been mooted as a potential buyer. The amount of interest in the steelworks has not changed the state government's expectations for when the steelworks will be sold, Mr Malinauskas said. The premier said a sale in the second half of 2026 "probably looks about right". It comes as the state government continues to pour money into the facility to keep it operating during administration. June's state budget revealed another $384 million had been set aside for KordaMentha to keep the steelworks running until it found a buyer — on top of an initial $384 million allocated when it took over the steelworks in February. The new $384 million may not be expended in full, and the state government said it expected it to be split 50-50 between the state and federal governments. Mr Malinauskas said the "run rate of expenditure" during the administration was "going down". The federal government is yet to commit to its half of the $384 million in administration funding earmarked for next financial year. Federal Industry Minister Tim Ayres said the federal government was working "carefully" with the state government and would not make announcements about future investments "on the fly". "Of course, you would expect this is public money we're going through a proper due diligence process working carefully with our partners in the South Australian government," Mr Ayres said. "I would be expecting to make announcements about that shortly." Mr Malinauskas also attended a ribbon cutting ceremony on Tuesday to mark the completion of a $32.4 million upgrade of Whyalla Airport. The upgrade — funded with $16.2 million from the federal government, $13.8 million from the state and $2.4 million from the council — will allow QantasLink's 74-seat Q400 aircraft to service Whyalla. The council-owned airport was previously running on a deficit of $800,000 a year. It also suffered a drop in passenger numbers and the permanent departure of Rex Airlines due to a security screening charge.
Yahoo
14-05-2025
- Business
- Yahoo
Can Mixed Fundamentals Have A Negative Impact on BlueScope Steel Limited (ASX:BSL) Current Share Price Momentum?
Most readers would already be aware that BlueScope Steel's (ASX:BSL) stock increased significantly by 12% over the past month. However, we wonder if the company's inconsistent financials would have any adverse impact on the current share price momentum. In this article, we decided to focus on BlueScope Steel's ROE. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital. We've discovered 1 warning sign about BlueScope Steel. View them for free. ROE can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for BlueScope Steel is: 5.5% = AU$645m ÷ AU$12b (Based on the trailing twelve months to December 2024). The 'return' refers to a company's earnings over the last year. That means that for every A$1 worth of shareholders' equity, the company generated A$0.05 in profit. View our latest analysis for BlueScope Steel So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. On the face of it, BlueScope Steel's ROE is not much to talk about. Next, when compared to the average industry ROE of 12%, the company's ROE leaves us feeling even less enthusiastic. Accordingly, BlueScope Steel's low net income growth of 2.9% over the past five years can possibly be explained by the low ROE amongst other factors. Next, on comparing with the industry net income growth, we found that BlueScope Steel's reported growth was lower than the industry growth of 20% over the last few years, which is not something we like to see. Earnings growth is a huge factor in stock valuation. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. If you're wondering about BlueScope Steel's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. BlueScope Steel has a low three-year median payout ratio of 23% (meaning, the company keeps the remaining 77% of profits) which means that the company is retaining more of its earnings. This should be reflected in its earnings growth number, but that's not the case. So there might be other factors at play here which could potentially be hampering growth. For example, the business has faced some headwinds. Additionally, BlueScope Steel has paid dividends over a period of at least ten years, which means that the company's management is determined to pay dividends even if it means little to no earnings growth. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 25%. Regardless, the future ROE for BlueScope Steel is predicted to rise to 8.1% despite there being not much change expected in its payout ratio. On the whole, we feel that the performance shown by BlueScope Steel can be open to many interpretations. Even though it appears to be retaining most of its profits, given the low ROE, investors may not be benefitting from all that reinvestment after all. The low earnings growth suggests our theory correct. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18-03-2025
- Business
- Yahoo
BlueScope Steel (ASX:BSL) shareholders have earned a 24% CAGR over the last five years
When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, you can make far more than 100% on a really good stock. For example, the BlueScope Steel Limited (ASX:BSL) share price has soared 164% in the last half decade. Most would be very happy with that. It's also good to see the share price up 14% over the last quarter. With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies. View our latest analysis for BlueScope Steel While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). Over half a decade, BlueScope Steel managed to grow its earnings per share at 1.9% a year. This EPS growth is lower than the 21% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on BlueScope Steel's earnings, revenue and cash flow. It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, BlueScope Steel's TSR for the last 5 years was 197%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return. BlueScope Steel shareholders gained a total return of 4.0% during the year. Unfortunately this falls short of the market return. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 24% over five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - BlueScope Steel has 1 warning sign we think you should be aware of. If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
19-02-2025
- Business
- Yahoo
BlueScope Steel (ASX:BSL) Is Due To Pay A Dividend Of A$0.30
The board of BlueScope Steel Limited (ASX:BSL) has announced that it will pay a dividend on the 25th of March, with investors receiving A$0.30 per share. This takes the annual payment to 2.4% of the current stock price, which unfortunately is below what the industry is paying. See our latest analysis for BlueScope Steel Even a low dividend yield can be attractive if it is sustained for years on end. The last payment was quite easily covered by earnings, but it made up 166% of cash flows. While the company may be more focused on returning cash to shareholders than growing the business at this time, we think that a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges. Looking forward, earnings per share is forecast to rise by 80.1% over the next year. If the dividend continues on this path, the payout ratio could be 33% by next year, which we think can be pretty sustainable going forward. While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of A$0.06 in 2015 to the most recent total annual payment of A$0.60. This implies that the company grew its distributions at a yearly rate of about 26% over that duration. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious. Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. However, BlueScope Steel's EPS was effectively flat over the past five years, which could stop the company from paying more every year. BlueScope Steel is struggling to find viable investments, so it is returning more to shareholders. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future. Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We don't think BlueScope Steel is a great stock to add to your portfolio if income is your focus. It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for BlueScope Steel that investors should take into consideration. Is BlueScope Steel not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Reuters
17-02-2025
- Business
- Reuters
Australian steelmaker BlueScope sees Trump's tariffs as a boon
SYDNEY, Feb 17 (Reuters) - BlueScope Steel ( opens new tab, Australia's largest steelmaker, will be a beneficiary of U.S. President Donald Trump's protectionist tariffs, CEO Mark Vassella said on Monday, saying that he expects higher prices to boost BlueScope's profits in North America. After BlueScope posted a better-than-expected first-half profit, Vassella said steel prices were already "moving in the right direction" following Trump's announcement of 25% tariffs on imports of steel and aluminium into the U.S., without exceptions for allies such as Australia. "If prices go up, as we saw last time, then the short answer is, Yes, we stand to benefit," he said, noting that steel prices were up 20% since Trump's tariff announcement a week ago. BlueScope operates five businesses in North America. The profit and upbeat commentary sent BlueScope stock to its highest level since August 2021, climbing 12% to A$25.03 ($15.90) in early trading, while the benchmark S&P/ASX 200 (.AXJO), opens new tab index was down 0.7%. Melbourne-based BlueScope's primary steelmaking operation in Australia is Port Kembla Steelworks near Sydney. It produces over 3 million tonnes of crude steel domestically per year, of which it exports about 300,000 tonnes to the U.S. The company's five businesses in North America include the North Star mill in Ohio, which together produce about 3 million tonnes. "It's really a 300,000 tonnes versus a 3 million tonne argument," Vassella said. Underlying demand in the U.S. for the company's steel was "pretty good"' for industries such as building and construction, automotive and manufacturing end-use, he said. Vassella said the Trump administration's previous steel tariffs drove steel prices up from $500 to $800-900 per tonne. "Being a domestic manufacturer, we will potentially benefit from any increase in price that occurred because of the tariffs and the impact they have on imported steel coming into the country," he said. North America was BlueScope's biggest revenue-generating geography in the six months to December 31, 2024, accounting for 42%, or A$309 million, of all underlying earnings before interest, tax, depreciation and amortisation. Australia made up 39% or A$288 million. BlueScope's first-half net profit dropped 59% to A$179.1 million, but still came in ahead of consensus analyst forecasts of A$170 million. The steelmaker lifted its interim dividend by 20% to 30 Australian cents per share. ($1 = 1.5738 Australian dollars)
