BlueScope Steel has reported a bumper $407 million profit today but warned that a continued global downturn could see it
fall into the red.
The profit result was up from $116 million this time last year and comes despite substantially lower demand for steel globally and in Australia.
Managing Director and CEO Paul O'Malley said the result was driven by the weak Australian dollar.
"This excellent first half result was driven predominantly by improved spread and the weaker Australian dollar in the first quarter,'' he said.
However, Mr O'Malley warned that, moving forward, the outlook was bleak.
He said should global demand continue to drop, the company's balance sheet could go into negative territory.
"Should lower demand and prices, coupled with high raw material prices, continue we expect to see a negative underlying net profit after tax contribution for second half 2009 (result), the extent of which is dependent upon demand and spread,'' he said.
"Government stimulus packages may translate into some improvement in economic activity later this calendar year, but it remains to be seen how it will affect steel demand.''
BlueScope has also flagged possible redundancies as one strategy to weather the global financial crisis.
For more coverage see Tuesday's Mercury.
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