BlueScope Steel Limited

FY26 underlying EBIT was $1.27 billion, materially higher than FY25; second-half EBIT was $716 million, above the top end of guidance. Underlying net profit after tax was just over $800 million. Year-end net debt was $600 million, and free cash flow was $240 million. FY26 capital expenditure was $1.5 billion. The Board approved an unfranked final dividend of $0.65 per share and an unfranked special dividend of $0.70 per share, bringing calendar 2026 distributions to $3 per share and about $1.3 billion in total. For 1H27, BlueScope expects underlying EBIT of $860 million to $960 million, subject to spread, FX and market conditions.

Tania Archibald framed FY26 as a defining year in which BlueScope accelerated value delivery across growth, cost, property and shareholder returns. She emphasized that peak capex is now behind the company, major projects are moving from construction into ramp-up, and the business is becoming a leaner, simpler manufacturer with stronger cash generation. Her tone was upbeat but grounded, repeatedly stressing resilience in Australia, strength in North America, early recovery signs in New Zealand, and ongoing pressure from Chinese overcapacity in regional steel spreads.

David Fallu focused on the financial mechanics behind the stronger results: North Star drove a material lift in net spreads, Australia benefited from stronger domestic volumes and cost discipline, and Asia remained strong despite weaker China. He said the new $150 million cost-reduction target has been exceeded and should flow fully into FY27 as a net benefit, while FY26 free cash flow of $240 million was constrained by peak capex. He also noted net debt of $600 million sat well within target range, liquidity was ample, and FY27 capex will still be elevated as the company completes the remaining $500 million of the program before normalizing.

Analysts pressed management on Australia’s second-half margin/ASP performance, the impact of blast furnace 6 timing, and the ramp-up of Metal Coating Line #7. Management said Australia’s results were affected by non-repeat items, transition-related costs, and roughly $20 million to $30 million of specific cost impacts tied to decarbonization trials and inventory/transition effects; they stressed the business remains profitable despite low spreads and expects the ramp-up to support longer-term volume growth. Questions on North American pricing lags and fixed-price contracts were answered by explaining these contracts are longstanding, reset annually, and help manage volatility. Analysts also asked about BCP’s progress, buyback reactivation, and property monetization; management said BCP is making progress but remains a couple of years behind plan, the buyback can be reactivated, and property will likely be monetized through a mix of sales, partnerships and selective development depending on asset characteristics.