BlueScope has more than doubled its profits in this financial year.
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In the 2015-16 financial year it saw a net profit after tax of $353.8 million – up 160 per cent from the previous year’s $136.3 million.
CEO Paul O’Malley said the improvement was due to “our direct interventions in reducing costs” but warned that the work was not yet done if the Port Kembla steelworks was to remain viable.
“Moving forward, we must not be complacent in our pursuit of continued productivity improvements,” Mr O’Malley said.
“We need to deliver returns necessary to support a decision in 10 to 15 years to reline the blast furnace at Port Kembla. What we have achieved in the last year is essential to being the competitive and profitable producer needed to support this future reinvestment opportunity.”
However, a report delivered to investors on Monday effectively states that Plan B – closure of the plant – is still on the table.
The report said if no reline of the blast furnace occurred then the company “must minimise future costs for Plan B”.
In the last financial year, the company made $235 million in savings in its Australian business.
The report sets an even bigger target for the coming year of $280 million – which Mr O’Malley has said is ongoing savings from 2015-16 and not fresh cuts.
Speaking about last year’s Plan A – which looked to make at least $200 million of cuts to keep the steelworks open – Mr O’Malley said it had been a success.
His presentation today said it saved 4500 jobs and avoided an estimated $750 million in costs to close down Port Kembla.
“In Australian and New Zealand steelmaking, progress on cost savings has provided the basis to continue to make steel for now,” he said.
“In the Illawarra, the constructive engagement by employees, the management team, union leaders, the Fair Work Commission and the NSW government was essential and outstanding.”