S&P/ASX 200 Index (ASX: XJO) share BlueScope Steel Ltd (ASX: BSL) is coming under some heavy selling pressure today.
Shares in the manufacturer of painted and coated steel products closed on Friday trading for $20.52. In late morning trade on Monday, shares are changing hands for $19.74 apiece, down 3.4%.
For some context, the ASX 200 is down 0.1% at this same time.
BlueScope's shares are underperforming the benchmark today following the release of the company's full-year financial results (FY 2024).
Read on for the highlights.
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ASX 200 share slips on retreating profits
- Reported net profit after tax (NPAT) of $806 million, down 20% from FY 2023
- Underlying earnings before interest and tax (EBIT) of $1.34 billion, down 17% year on year
- Net cash of $364 million, down from $614 million on 31 December
- Final fully franked dividend of 30 cents per share, up from last year's final dividend of 25 cents per share
What else happened with BlueScope in FY 2024?
Investors are bidding down the BlueScope share price today after the company's earnings and profits both came in below consensus expectations.
Free cash flow also went backwards for the ASX 200 share, coming in at $434 million for the 2024 financial year, down from $909 million reported in FY 2023.
The company said cash flow was hit due to lower earnings, higher working capital, and higher capital expenditure as BlueScope invests to "secure long-term sustainable earnings and growth".
On the positive side of the ledger, both BlueScope's net cash and dividend payouts exceeded market expectations.
Over the 12 months, the ASX 200 share returned $548 million to shareholders. That's part of its ongoing goal to distribute at least 50% of free cash flow as either dividends or on-market share buybacks.
Pleasingly for passive income investors, the board said it intends to increase the annual dividend payout to target 60 cents per share. With the 55 cents per share declared for FY 2024, BlueScope shares trade on a fully franked dividend yield of 2.8%.
The board also approved an extension of BlueScope's share buyback program to allow up to $270 million to be bought over the next 12 months.
With all of the above financial metrics in mind, Citi has a buy rating on BlueScope shares (broker data courtesy of The Australian). Citi has a target price of $23.70 a share, representing a potential upside of 20% from current levels.
What did management say?
Commenting on the results that have yet to lift the ASX 200 share today, BlueScope CEO Mark Vassella said, "Underlying EBIT for the year was $1.34 billion, representing a solid performance in the context of macroeconomic and industry volatility."
Vassella added:
While this reflects a lower result than FY 2023, it again demonstrates BlueScope's resilience, as strength in the US steelmaking and global downstream operations offset the impacts of bottom-of-cycle Asian steel spreads on our Australian and New Zealand steelmaking businesses…
Despite the lower operating cash flow, BlueScope again finished the year with a robust balance sheet, with $364 million net cash.
What's next for the ASX 200 share?
Looking at what could impact the ASX 200 share in the year ahead, BlueScope said it's seeing macroeconomic challenges across its largest operating regions.
As such, management expects underlying EBIT in 1H FY 2025 to be in the range of $350 million to $420 million. That compares to underlying EBIT of $718 million achieved in 1H FY 2024.
BlueScope share price snapshot
With today's intraday losses factored in, the ASX 200 share is down just over 6% since this time last year.
