Here's how the BlueScope (ASX:BSL) share price leapt 20% in 2021

Here's why this ASX 200 stock outperformed the index last year.

| More on:
Three workers jump in the air at a steel factory.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The BlueScope Steel Limited (ASX: BSL) share price had a ripper 2021 despite the company staying relatively quiet.

In fact, the only time the market heard price-sensitive news from the manufacturer of steel products was whenever it released results or updated earnings guidance.

At the end of 2020, the BlueScope share price was going for $17.48. Come the final session of 2021, the company's stock finished at $20.90.

That sees it posting a 19.5% gain for the 12-month period. For comparison, the S&P/ASX 200 Index (ASX: XJO) increased 13% over the same period.

Let's take a closer look at what helped drive the company's stock last year.

Here's what drove the BlueScope share price in 2021

The year started off well for BlueScope when it released an exciting update in January.

It announced that its preliminary unaudited earnings before interest and tax (EBIT) for the first half of financial year 2021 was expected to be 11.5% higher than its previous guidance, coming in at around $530 million. The company also provided a positive business update.

The market's excitement over the profit increase pushed the BlueScope share price 3% higher, and another 2% higher when its preliminary expectations were confirmed the following month.

In February, BlueScope announced its net profit after tax (NPAT) increased 78% over the 6 months ended 31 December, coming in at $330.3 million.

Another profit upgrade boosted the company's stock in April. Though, its biggest gain came in July when it released its preliminary, unaudited, underlying results for financial year 2021.

The company announced its earnings before interest, tax, depreciation, and amortisation (EBITDA) was expected to be around $1.72 billion. That was confirmed in the company's official full year results, released in August.

Impressively, the company's EBITDA ended up being nearly $1 billion more than the bottom of its initial guidance. It was also 207% more than it was in financial year 2020.

As a result, the company announced a 25 cent final dividend and a 19 cent special dividend. It also announced a $500 million share buyback.

The final news to boost the BlueScope share price in 2021 was released in October. Readers may assume it was news of another profit upgrade, and they would be correct.

The company's stock gained 0.75% when it announced it expects its underlying EBIT for the first half of financial year 2022 to be between $2.1 billion and $2.3 billion – $300 million more than it previously predicted.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Materials Shares

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why is this ASX mining stock crashing 14% today?

Let's see what is causing investors to hit the sell button on Monday.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

$10,000 invested in BHP shares in FY25 is now worth

Did the Big Australian outperform or underperform during the last financial year?

Read more »

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.
Share Market News

Why did Macquarie just downgrade Liontown resources shares?

Here’s what the broker had to say about this materials company. 

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why did Macquarie downgrade Mineral Resources shares?

The broker is no longer bullish on this mining and mining services company.

Read more »

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Materials Shares

Brickworks shares rise 1% on trading update

Investors seem delighted by a new update from Brickworks.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Does Macquarie prefer Rio or BHP shares today?

Let's find out which mining giant is the better pick right now according to the broker.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Bell Potter says this ASX 300 mining stock could rise 125%

Let's see what the broker is saying about this stock.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Materials Shares

Guess which ASX mining stock is up 8% today and could rocket a further 200%

Bell Potter has good things to say about this mining stock which released an announcement today.

Read more »