Full Year 2022 BlueScope Steel Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Peter Steyn - Macquarie Research - Analyst : Just wanted to dig in to your North Star guidance for the second half very briefly. You've obviously guided spread outcomes. You've spoken to the prospect of doing a little bit better relative to benchmark. But curious whether there's anything on the cost side of the business that we need to think about, just calibrating that outlook for 1/4 of the EBIT in the first half?

Question: Peter Steyn - Macquarie Research - Analyst : Perfect. And embedded in that spread projection, given the averages to date, it does suggest that you're expecting, in your outlook commentary, further price weakness beyond spot?

Question: Peter Steyn - Macquarie Research - Analyst : Mark, I won't belabor it. Then just wanted to go into the inventory conversation very briefly with a keen focus on the risk. I'm just trying to work out whether you believe that you've adequately covered the risks in the short run of those inventory positions, particularly in Australia and maybe [it's early] import you've outlined in ASEAN just in the context of what we're seeing from a demand perspective and confidence levels and the like that are likely to flow with higher interest rates.

Question: Lyndon Fagan - JPMorgan Chase & Co, Research Division - Analyst : So my first question was just to try and pick up again on that cold rolling capacity that you need another USD 500 or call it, AUD 700. I'm just wondering when we think with regards to your vision for the U.S., what -- how many more pieces of the jig puzzle are potentially missing that might sort of be this type of order of magnitude? And I guess I'm looking at Slide 35 with $1.9 billion future investment. I guess we need to up that by another $700 million at least. But yes, if you wouldn't mind sharing some thoughts about your U.S. vision and how we, I guess, satisfy that?

Question: Lyndon Fagan - JPMorgan Chase & Co, Research Division - Analyst : So the deployment time frame for that $700 million, I'm assuming that doesn't fit within that FY '23 to '27 chart there? Or is it that...

Question: Anderson Chow - Jarden Limited, Research Division - Analyst : Just a couple of questions. First one is on the U.S. coil coating business. You talked about the long-term aspiration of CRC capacity. But I just want to kind of get a sense of the near-term driver for the business. Do you need to -- how much more sort of OpEx do you need to -- you think you might need to spend in order to drive up the utilization and sales volume? Is there a sense that you could invest?

Question: Anderson Chow - Jarden Limited, Research Division - Analyst : And just a small question on dividend policy. You talked about sort of starting to pay fully or partly franked dividend. Are you likely to change that $0.50 per share cash dividend and -- at all? Or it's still sort of similar mix between cash dividend and share buyback?

Question: Lee Power - UBS Investment Bank, Research Division - Analyst : Just on BlueScope Properties, negligible contribution in first half '23, I think you've allocated a couple of [hundred] million dollars more capital into that business. What's kind of the time line for that? So when do we think that flows through and you get kind of more of a normalized earnings rate?

Question: Lee Power - UBS Investment Bank, Research Division - Analyst : Okay. And then just on the CapEx, like, I understand you got several larger projects kind of at varying stages of approval. Like how do you think about expansion projects? So if we take like ASP and metal coating as example, do you think about them on a mid-cycle basis when you're assessing them? Or do you look at kind of the point in the cycle and think about your comments around stock and what's going to happen beyond first half '23?

Question: Lee Power - UBS Investment Bank, Research Division - Analyst : And what about on the way -- on the flip side, like if you think about ASP and potentially volumes coming under pressure, like how do we think about metal coating in ASP and some of the capacity that you're thinking about spending there?