After going through the pain of 2015, Bluescope is now feeling the gain.
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In his first profit announcement to the stock exchange since he become CEO Mark Vassella said the steelmaker had made a $516.8 million half-year profit before tax.
This is the third-straight half-year profit over $500 million.
The Australian Steel Products (ASP) section, which includes the Port Kembla steelworks, saw an income fall of five per cent to $261.7 million but it is still in the black.
In 2015 employees at Port Kembla were given an ultimatum – either cut costs by $200 million (Plan A) or turn the lights out and close the gates (Plan B).
Mr Vassella said the “hard work and sacrifice” made by employees in 2015 has set the company up to better weather any future storms.
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“The work that’s been done in 2011-12 and again in 2015 to ensure that we’ve got that base right means that the business is actually doing okay,” Mr Vassella said.
“We don’t want to be in a position again where the future is at risk.”
Mr Vassella said the ASP sector was being structured to ensure it was still in the black, even when the steel price cycle was at its lowest point.
“If we ever get to the point again where the steel industry is at the bottom of the cycle and we’re getting the low spreads [the sale price of steel versus raw material costs] we need to be able to cover our costs and cover the reinvestment or quite frankly we’re borrowing the money from the organisation to keep the lights on,” he said.
At Port Kembla, things have turned around enough that the company is now hiring again.
“Over the last 12 months we have been recruiting, which is good because prior to that it was more the other way,” Mr Vassella said.
“It’s nice to be putting people on.”
While Port Kembla’s section has done “an excellent job" in boosting profitability since 2015, this needed to continue to guarantee the gates at Port Kembla remain open.
“The business delivered good results in the first half of financial year 2018, however we must not be complacent in our pursuit of continued productivity improvements particularly having regard to energy cost pressures,” he said.
“We need to deliver returns necessary to support a decision in 10 to 15 years to reline the blast furnace.”
Mr Vassella said it was a good time to take the reins from outgoing CEO Paul O’Malley
“It’s great to get the opportunity,” he said.
“The company’s in good shape, so it’s a nice time to be in the role. We’ve got a real chance of securing the future of steelmaking in Australia.”