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BlueScope narrows net loss as subsidiary plans to grow

Keywords: Tags  BlueScope Steel, BlueScope Lysaght Indonesia, roll-formed steel, Paul O'Malley, Willius Suwadana, Lucia Karina, Steel First, Weilyn Loo

SINGAPORE — Australia’s largest steelmaker, BlueScope Steel Ltd., posted an Australian $12-million ($12.3-million) net loss for its fiscal first half, an improvement over its A$530-million loss a year earlier despite an 18-percent dip in revenue to A$3.7 billion ($3.8 billion) from A$4.5 billion.

Melbourne-based BlueScope said it stemmed its losses for the six months ended Dec. 31 by shutting down a blast furnace, halting unprofitable exports and cutting long-term investment at its Port Kembla Works.

BlueScope’s Australian coated and industrial products division, the biggest unit by sales, turned a profit—posting earnings before interest, taxes, depreciation and amortization (Ebitda) of A$79 million ($81 million) in contrast to a loss of A$94 million a year earlier—"despite difficult trading conditions," managing director and chief executive officer Paul O’Malley said. The "difficult conditions" included some softening of domestic volumes and dumped imports, which the company expects to be partially stemmed following the Australian government’s anti-dumping reforms in December.

O’Malley said the company is set to benefit from a joint venture with Tokyo-based Nippon Steel & Sumitomo Metal Corp., which should be completed by the end of March.

"Net proceeds of approximately (U.S.) $540 million will deliver a very strong balance sheet and enhance financial flexibility to invest in growth opportunities," he said in a statement.

The company said it expects conditions to continue improving in the second half of its fiscal year.

Meanwhile, BlueScope subsidiary PT BlueScope Lysaght Indonesia announced plans to construct 10 plants across the country by 2016 in a bid to expand its sales and supply chain network. The Jakarta-based company will invest about $500,000 per location, vice president of corporate and external affairs Lucia Karina told AMM sister publication Steel First.

The company has already set up one new facility in Semarang and is progressing with three other facilities this year, Karina said.

PT BlueScope Lysaght Indonesia’s president director, Willius Suwandana, told the Jakarta Globe that the company is eyeing the cities of Balikpapan, Makassar and Palembang as potential sites for new plants. He said the new plants, which will manufacture roll-formed products, also will help cut distribution costs for consumers.

BlueScope Lysaght is a downstream group of companies providing roll-forming, cladding and associated building product solutions for the Australian and Asian construction markets.

BlueScope has one plant operating under PT BlueScope Steel Indonesia and four facilities under PT BlueScope Lysaght Indonesia in the country.

A version of this article was first published by AMM sister publication Steel First.

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