BlueScope Steel is pressing ahead with the $1 billion expansion of its North Star steel mill in the US, a move that would increase capacity by about 40 per cent.
The steel producer, which held its final dividend despite a 35 per cent drop in full-year profit to $1.02 billion and the likelihood of lower earnings to come, said the move would increase capacity at North Star by 850,000 metric tonnes per annum when complete by the end of FY23.
Chief executive Mark Vassella said North Star, which is currently at full capacity, could eventually produce even more.
“The project has future potential growth, through possible de-bottlenecking to add a further 500,000 metric tonnes per annum of steelmaking capacity,” Mr Vassella said.
“This project fits our strategy perfectly: it offers long-term sustainable earnings growth from a high-quality asset.”
BlueScope’s total sales for the 12 months to June 30 rose by 9.0 per cent to $12.53 billion but the bottom line was hit by increased raw material costs and the absence of last year’s big one-off gains that included tax offsets.
Underlying earnings before interest and tax rose 6.2 per cent to meet June’s downgraded guidance of $1.35 billion and BlueScope, which held its unfranked final dividend at 8.0 cents, tipped first-half underlying EBIT to be lower than each of the two previous periods.
At 1030 AEST, shares in BlueScope were 6.9 per cent lower at $11.355.