BSL - Bluescope Steel

[qldfrog]

@peter2 , on a stock so easily affected by a Trump speech or a BOC decision, do you take this into account or do you purely look at it from a pure chartist point of view? Not bothering if it produces steel in Australia, could be selling sushi in Norway who cares attitude?
This is where i find it very difficult when i try to add a non systemic input....

 

[peter2]

I tend to not worry about outside interference when trading weekly charts as the aim is to hold for the medium term and the iSL are usually well outside the normal volatility level. It concerns me when I'm trading very short term, but there's nothing I can do about it. I just have to take the good and the bad.

Yes, I do form an opinion on an industry and company. This is generally a bad thing. It's saved me on many occasions but I've also passed on setups that have turned into monster trends.

I remind myself that my job is to start trades at the best time and price that are defined by my strategies. If I'd bought BSL at the BO at 13.20 I won't be concerned by Trump now that the price is at 15.00. Buying now at 15.00 is much more risky than at 13.20. We're closer the the end of the trend.

 

[sptrawler]

Could be a big drop for Bluescope, 70% drop in first half profits
https://www.theage.com.au/business/...irus-impact-profit-dives-20200224-p543mv.html

 

[bigdog]

ASX announcement
19/03/2020 9:01:23 AM Market Update and Withdrawal of Earnings Guidance (uploaded below)

Market liked ANN

 

[Dona Ferentes]

BSL at a 10 year high ... closing above $23.00

another aspect of the BSL story has been sorting out exactly what the company wants to achieve. There is a piece, self-serving but with elements of truth, about an activist investor driving change:

Since founding Sandon Capital in 2009, Gabriel Radzyminski has built the asset manager and its market-beating returns on a mix of value investing and shareholder activism.

One example of a successful turnaround in value is Sandon’s 2015 investment in steel-maker BlueScope.

“At the time BlueScope was described as a pariah in the market. I think they were losing something like $100 million a year just from the Port Kembla blast furnace,” Radzyminski says. “But we saw it as actually one of the cheapest and best steel companies in the world. Most Australian investors overlooked the fact they owned a 50 per cent stake in the North Star joint venture in the US with Cargill, which is arguably the single best North American steel asset that exists today.”

Radzyminski says .. Sandon argued BlueScope should mothball the loss-making Port Kembla furnace in New South Wales to unlock more value in the overall business'

“And so the company eventually came out with a plan where they put the gauntlet down to the employees to say look, we need to save X-hundred million dollars a year out of Port Kembla or we’re going to shut it down,” he says. “It worked, and I think it’s one of the great unsung success stories of Australian industrial relations because the company, the unions, the employees and to a degree the state government all worked together to make those savings to keep the thing alive.”

Sandon eventually sold its BlueScope shares for “a few multiples of what it paid” after BlueScope’s management went on to buy Cargill out for 100 per cent ownership of the US North Star asset.

-- how much is his work, and how much the inertia of change happening anyhow, is moot. Good to see BSL positioned well for the emerging post Covid economic growth.

 

[Dona Ferentes]

BSL now $24.50
QUOTE
Earnings before interest and tax would total $1.72 billion for the year ended 30 Jun, well past analyst forecasts for EBIT just below $1.6 billion.
EBIT in the June half to hit $1.19 billion, up from previous guidance of $1.08B.
.

...in the US, where BlueScope is enjoying the best conditions in generations, as demand from the automotive, manufacturing and non residential construction sectors propel prices of hot rolled coil (HRC) steel to levels not seen in decades. A year ago, HRC prices were sitting at $US428 per short ton; now, prices are about $US1800, and lead times to get steel delivered have blown out to 10 weeks.

Demand in Australia and New Zealand was strong, with growth in the construction, distribution and manufacturing sectors helping domestic steel mill sales rise above 1.3 million tonnes, the highest level since 2008. Local EBIT jumped 60 per cent in the second half compared with the first, suggesting a full-year result of about $673 million, compared with the year-earlier $305 million.

 

[Miner]

BSL now $24.50
QUOTE
Earnings before interest and tax would total $1.72 billion for the year ended 30 Jun, well past analyst forecasts for EBIT just below $1.6 billion.
EBIT in the June half to hit $1.19 billion, up from previous guidance of $1.08B.
.

In one year BSL price is $15.81 about
Stock specialist initiated a buy but price dived down. I do not believe these recommendations when in front they said buy, inside strong sell.

 

[Dona Ferentes]

BlueScope today reported FY2022 net profit after tax (NPAT) of $2.81 billion, a 135 per cent, or $1.62 billion increase over FY2021.

Announcing the result, Managing Director and CEO, Mark Vassella said,

“Underlying EBIT for the year was $3.79 billion, a record performance in BlueScope’s 20-year history as a listed company. This was an outstanding result, with tremendous performances across our business portfolio.”

“BlueScope delivered an underlying EBIT of $1.58 billion in 2H FY2022, the second best half-year result on record – beaten only by the 1H FY2022 result of $2.20 billion.” “We saw continued strong demand for our steel products and solutions despite recent macroeconomic and geopolitical volatility. We worked hard to improve our service levels which have been impacted by supply chain and pandemic related disruptions. .... ” Mr Vassella said.

“Operating cash flow, after capital expenditure including on the North Star expansion, was $1.71 billion. From this, investments of $1 billion were made in the US acquiring the MetalX ferrous recycling business and the Coil Coatings business. These were well considered and well executed investments in our US growth plan.”

“I’m pleased to state the balance sheet still remains strong with $367 million net cash at 30 June 2022. Our working capital remains elevated in the context of strong demand and prices and ongoing supply chain disruptions,” Mr Vassella said. “BlueScope has delivered for shareholders in FY2022. The Company made nearly $1 billion in shareholder returns, with $344 million in dividends and $638 million in on-market buy-backs.”

The Board has today approved an increase to the share buy-back program to allow up to a further $500 million to be bought over the next 12 months, and a final unfranked dividend of 25 cents per share. Having exhausted Australian tax losses in FY2022, the Company expects to be able to begin to frank dividends in FY2023

 

[frugal.rock]

Do Bluescope make zero carbon steel?

No, they don’t (atleast not yet), so they would be required to buy their raw material eg Iron or Steel, from a mill that makes zero carbon Iron or steel, they then could use their proprietary coatings and brand to turn that zero carbon steel into colour bond roofing sheets.

 

[Miner]

@frugal.rock
Happy Saturday. What was your message ? Green in 'blue'scope

 

[frugal.rock]

What was your message ?

I'm a magician. I've learnt the disappear trick. Now you see it...
and a happy Saturday to yourself also and thankyou for your well wishes. ?

 

[finicky]

Have to say I quite like the monthly chart prospect for BSL. It could be just correcting (flag?) for a few months after the preceding rally. Bullish engulfing candle so far for June.
DId a brief browse of a recent free report from Fairmont Equities which is fairly positive for an investment thesis looking through to 2025. Fundamentally complicated report. Nice vigorous looking long term chart historically.
Momentum indicators (monthly) look positioned well and the major correction has gone on for about as long as the prior one (2018 - 2020?

Not Held

Monthly

 

[finicky]

Think I'll have to retract my chart call for Bluescope. I based it on the monthly chart without looking at other durations. Having now looked at the weekly, my perception is of weakness from the broadening shape of the rally from Sep '22, deep overlapping of swing highs by following dips, and overbalancing of the trend.
Probably influenced by a subsequent sqizz at H1 results and H2 guidance:
H1FY23 NPAT $600m which is down $1,045m on H1FY22
And H2 is guided to be worse. The dreaded " softening macroeconomic conditions" cited.
FY22 though was a year of exceptional outperformance going by Commsec stats.
BSL still looks undervalued if I am to take a longer view, as ROE of 13% looks reasonable to take as a median figure over the last 6 years and that to me should be worth a base case of >2X book value. And book value FY22 was $21! They're buying back shares and hold substantial cash net of debt according to their H1 report.
Will stay interested but not buying near term. And will try to plough through the Fairmont Equities report if it remains downloadable.

Not Held

WEEKLY

 

[frugal.rock]

Hopefully Qantas gets the new record after this...

Record $57.5 million penalty for BlueScope’s attempted price fixing​

Record $57.5 million penalty for BlueScope’s attempted price fixing

Steel manufacturer BlueScope Steel has been ordered to pay a $57.5 million penalty for attempting to fix prices for flat steel products supplied in Australia. The penalty ordered by the Federal Court today is the highest penalty ever imposed for cartel conduct in Australia.

www.accc.gov.au

 

[_lucky_]

Hi everyone,

Just trying to understand why BSL has performed so badly over the last week when the ASX 200 has gone up so much. There have been no company announecments. Any ideas what is causing the poor sentiment and price?

thanks
David

 

[tech/a]

Possibly AUD.

 

[rcw1]

Good morning

Morgan Stanley slashes Bluescope Steel to Underweight from Overweight and cuts its price target 25 per cent to $18.00, a move that may trigger a selloff in Bluescope shares.

The broker sees "material" downside risk to consensus earnings estimates from decade-low Asian steel spreads and lower US spreads, and softer Australian residential construction to high-margin Colorbond volumes.

"We continue to view Bluescope as as a high-quality cyclical, with good management and a strong balance sheet," says Morgan Stanley analyst Andrew Scott.

"However, current spreads point to material risk to 2H consensus estimates."

"We would prefer to revisit when estimates are rebased and/or when commodity/end
market trends are more favourable."


Kind regards
rcw1

 

[divs4ever]

Good morning

Morgan Stanley slashes Bluescope Steel to Underweight from Overweight and cuts its price target 25 per cent to $18.00, a move that may trigger a selloff in Bluescope shares.

The broker sees "material" downside risk to consensus earnings estimates from decade-low Asian steel spreads and lower US spreads, and softer Australian residential construction to high-margin Colorbond volumes.

"We continue to view Bluescope as as a high-quality cyclical, with good management and a strong balance sheet," says Morgan Stanley analyst Andrew Scott.

"However, current spreads point to material risk to 2H consensus estimates."

"We would prefer to revisit when estimates are rebased and/or when commodity/end
market trends are more favourable."


Kind regards
rcw1

hmmm , yes i noticed BSL is being sold down recently

now back around the time of the six into one consolidation i was having a LOT of fun in BSL and had a very nice ride after the consolidation

however at the time BSL was very popular with various styles of traders , is that sort of excitement coming back to BSL ( and do i want to play there again )

( i don't hold BSL currently )

 

[_lucky_]

Good morning

Morgan Stanley slashes Bluescope Steel to Underweight from Overweight and cuts its price target 25 per cent to $18.00, a move that may trigger a selloff in Bluescope shares.

The broker sees "material" downside risk to consensus earnings estimates from decade-low Asian steel spreads and lower US spreads, and softer Australian residential construction to high-margin Colorbond volumes.

"We continue to view Bluescope as as a high-quality cyclical, with good management and a strong balance sheet," says Morgan Stanley analyst Andrew Scott.

"However, current spreads point to material risk to 2H consensus estimates."

"We would prefer to revisit when estimates are rebased and/or when commodity/end
market trends are more favourable."


Kind regards
rcw1

Yeah, it tanked yesterday after the Morgan Stanley report. I was talking about the days before the report though. There was a lot of selling pressure, even though the rest of the market was going up. Also, I wonder if the Morgan Stanley report has factored in the record net positive migration that has taken place and continues to take place for Australia under Labour, placing massive pressure on housing and the federal government's $12B housing plan to build record homes over the coming years..

 

[mullokintyre]

Bluescopr are attempting to enter the US market with its colourbond roofing material according to AFR.

BlueScope announced on Monday that a feasibility study for the US expansion was underway, as it said its first-half net profit fell 23 per cent to $439 million. Steel margins are falling in Australia and the United States, but have slumped the most in Asia.
BlueScope warned that profits in the June half would be lower again. The company kept the interim dividend steady at 25¢ per share.
Mr Vassella said there had been excess steel exported out of China as that country’s construction sector softened, which had sent steel spreads slumping to the lowest in two decades in Asian markets.

“It’s driven margins that are at 20-year lows,” Mr Vassella said.
He said China had exported 93 million tonnes of steel in calendar 2023. To put that in context, BlueScope’s plant at Port Kembla in NSW makes about 3 million tonnes of steel annually.
While there are other elements to the US expansion, the centrepiece is a proposed new plant, likely be built near the company’s North Star steel mill in Ohio.

Be a tough gig to get into.
Not sure if I would be game enough to bet on them making a success of it.
mick