BlueScope reports drop in profit in 2023 after bumper 2022

Speaking as the steelmaker delivered a profit result below last year's record highs, Mr Vassella said the business was preparing a submission on the government's proposed emissions reduction mechanism.

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"With final safeguard reforms expected to be announced in the second half of FY 2023, until they're announced it's too early to state with any certainty the potential implications of such reforms on ASP and the feasibility study of the No. 6 blast furnace reline and upgrade."

Under Labor's plan to cut emissions, the country's biggest emitters will be required to cut emissions intensity by 4.9 per cent per year.

Submissions on the policy are due by the end of the week.

Another headache for the company will be the resolution of the ACCC's cartel case against the business and former executive Jason Ellis.

A federal court judge ruled in December that Mr Ellis and BlueScope attempted to price fix the supply of flat steel products. A hearing on penalties is listed for April, but costs for the company could run into the millions.

While the company didn't reach the highs of 2022, Mr Vassella said he expects strong demand for its building products as demand in the construction sector continues to spur new projects.

In its half yearly reporting update, BlueScope reported a net profit after tax of $599 million, down by $1.045 billion from the $1.64 billion result in the first half of 2022.

The earnings of Australian Steel Products (ASP) division, which includes the Port Kembla steelworks, were down 60 per cent on the results from 2022, with underlying earnings of $274 million.

Earnings were hit this half due to weather impacts on the building and construction sector, as well as the end of the HomeBuilder program which spurred building activity in 2022, Mr Vassella said.

"We've seen detached housing starts, which is a really key indicator for us, soften, but they softened back to historical levels that come off the very peaky levels that they were at with all of the government stimulus money that was pumped into the economy," he said.

"They're back within a range that we're quite comfortable with."

Looking ahead, the company expects lower earnings for the second half of 2023, with the result expected to fall between $480 million to $550 million.

The company expects significant investment in the Port Kembla steelworks in the coming years, with projects such as the $70 million Port Kembla pipe and tube mill and $1 billion allocated towards the blast furnace reline and upgrade.

So far, the blast furnace reline project has involved tendering and negotiations of contracts for long-lead time critical items.

"We have an over 100 [person] strong expert team working hard on the engineering development, scoping and tendering of approximately 600 work packages that together will deliver the project," Mr Vassella said.

The company is still consulting with local groups on its masterplan for the 200 hectares of excess land surrounding the steelworks, with Mr Vassella tight lipped on what had arisen in the first six months of consultation.

"In some ways we're doing a plan for a plan," he said. "Part of the process here is just gathering all of the ideas and thoughts that we can. The thing that's jumped out at me is just how massive this opportunity is, I don't think I even understood what we were getting ourselves into here. So this is a very exciting opportunity for the region and for the company."

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