“We didn’t expect the Chinese slowdown to be quite as dramatic,” Chief Executive Officer Paul O’Malley said today on a call with analysts. “In building activity, in our space in particular, we are seeing negative growth at the moment.”
Steel shipments from BlueScope’s engineered buildings unit fell 7 percent in China in the six months to December compared while volumes across Asia rose 10 percent, the company said today in a statement. China’s economy is forecast to expand at the weakest pace in almost a quarter century in 2014, according to economist estimates compiled by Bloomberg, as the nation moderates spending on infrastructure and factories.
BlueScope advanced 7.4 percent to A$6.305 at 12:23 p.m. in Sydney after posting a profit for the first time since 2010.
The company opened a plant in Xi’an, in central Shaanxi province, in July to tap development in the country’s central region, seeking to offer industrial buildings with vegetated roofs, rainwater harvesting and other environmental features.
Demand for BlueScope’s custom-made buildings in Asia will remain weak in the second half, said O’Malley. Asia accounted for 18.7 percent of BlueScope’s revenue in the 12 months to the end of June, according to filings.
Net income in the six months to the end of December was A$3.7 million, compared with a A$23.8 million loss in the same period a year earlier, lifted by demand for building products in North America, Australia and Thailand, the company said.
Underlying profit in the second half is expected to be similar to the previous six months, though planned maintenance shutdowns in Australia may reduce some production and export volumes, it said.
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