Monday, August 13, 2012

BlueScope on the right track - but not in Australia!

BlueScope are getting closer to profit?

Finally the BlueScope management and board are moving toward profit (maybe by 2014) and this involves leaving Australia and going overseas! The main driver of this proactive change from the board could be a result of this comment by Australian Shareholders Association chief executive Vas Kolesnikoff who described BlueScope Steel as a ‘‘serial underperformer’’ that will face a shareholders meeting in November this year after release of its full-year results on August 20th 2012. If they receive a second strike from these angry shareholders (more than 25% - it will trigger a board spill and new elections!). Now the announcement of a $1.36 Billion Joint Venture between Nippon Steel caused the biggest rally on the ASX today from 26 cents to 35 cents (nearly a 35% increase) and the publication details of this JV is available at http://tenbagsfull.com.au/ if you are already a member or click on the free invite list at the top right of this post for Ten Bags Full - a great share market community website.
It's also available on the BlueScope Website!
FY2012 results update!
The approximate reported net loss after tax will be $1 Billion dollars - this is hidden on one page (Page 20) within the Nippon Steel BlueScope Joint Venture Investor presentation! The ability to release really great news and income potential is brilliant involving this JV and at the same time including a little update of a $1 Billion loss for the FY2012. About time they got the smarts - after 15 years it's welcome - but the big question is:

Will management grant themselves bonus payments this year? On Friday BlueScope shares were 26 cents and one day of trading later they are 35 cents. A long way back to $6 or $12 per share! Shareholders will punish the bonus paid last year after that shattering loss, and there will be a shareholder spill of the board - politicians should take note also - the public, shareholders, workers, business people and even Bloggers have good memories.

These new JV's all over Asia, USA and the World will be good for BlueScope, as is the Nippon Steel JV - BUT it won't be BlueScopes massive management juggernaut in charge - it will be under the NS structure and much, much cheaper.
Here's some pictures of Nippon Steel!

Nippon Steel makes lots, & lots & lots of cold rolled steel!

This is Nippon Steel head office - that runs the world Nippon Steel Operation
The board has finally recognised the the slower recovery in domestic demand than previously forecast has been a big factor in the FY2012 loss! As stated here:
BlueScope Distribution $160 million,
CIPA approximately $135 million,
BlueScope Lysaght approximately $10 million,
BlueScope Water approximately $5 million.
I can eventually see BlueScope as an Australian company operating world wide and supplying Australia but not operating here! The management overload will finally be broken along with all of BlueScope workers in factories, smelters, distribution areas, rollforming and administration!

Well done by the Management of BlueScope, Unions involved and the ALP/Greens government in Australia to finally shaft the last iconic name in Australia!

Finally look at these statements and pick the persons who quoted them!

  1. If one job is lost......
  2. The Steel Transformation package.....
  3. It'll only cost a sausage sandwich a week...
  4. Someone stole my credit card.......
  5. The Australian dollar is the problem........
  6. It wasn't our fault.......
But the long term outlook of BlueScope is overseas - not here in Australia - and THAT is a BIG problem!




16 comments:

  1. Forgot to add that Hills had a great FY2012 report card with only the building division letting them down. Fletchers (Stramit due shortly).

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  3. the Hills results were fairly modest - even Hills are showing their disappointed in Fielders. Is there more that one Aramax machine? - they say mobile mills when referring to Aramax in their end of financial year overview could this be seen as deceptive? Pretty sad when the only positive about your business unit is a recent acquisition... They even go as far to say that Fielders held market share... - are they talking about the same market?? Looks like Lysaght aren't the only one to lose touch with the market..

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    1. Hills steel businesses 'made' ebit of $5.1m on sales of $605.0m including Korvest which made $8.7m ebit.
      Looks like Orrcon and Fielders are lost $3.6m ebit, negative returns $200m plus invested in them by Hills.
      And they can't sell them, any guesses why ??!!

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  4. SW - hope you removed your own comment above, as I didn't?? :)

    Good pick up!
    1. True or False: Do Fielders have only one Aramax mobile mill?
    2. Sad also when that positive revolves round ONE mobile mill?
    3. What market share - maybe in SA & WA over last year?

    Also O'Malley is not taking his bonus - wonder why!

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    1. is that fact about O'Malley ?

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    2. Fact,
      "Mr O'Malley revealed he would effectively be taking a pay freeze, with no increase in base pay or bonuses."

      Last year Mr O'Malley took the recommended bonuses and salary rises, taking home $2.7 million so he'll be a bit short this year??

      Also shares of BSL seemed to have bottomed out at around 38 cents!

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  5. There are multiple ARAMAX mills

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    1. Thanks for that:

      Do you know how many? (and are all mobile?)

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  6. all mobile, not sure on how many, at least 2 but possibly 3.

    I believe the profiles of each machine vary slightly

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  7. The deal with Nippon is a brilliant result for Bluescope, no debt means they can ride out the high iron ore and coal prices and the high $A here plus open up huge new markets with Nippon.

    O'Malley deserves a bonus !

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    1. Totally agree Trevor, The JV with Nippon got rid of their debt - true - but part of the debt was the investment in ASIA etc, so the main motive is the move of BlueScope to ASIA etc - and finish with Australia!

      Don't forget - they sold part of their Asian plants for this - but Australia subsidised them in their formation - two years running with over $2.5 Billion loss??

      All BlueScope developments will be overseas - not here until we settle down with the dollar, government, spending, CO2 Tax, and all the other price increases we are suffering, etc etc!

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  8. Hills steel businesses 'made' ebit of $5.1m on sales of $605.0m including Korvest which made $8.7m ebit.
    Looks like Orrcon and Fielders lost $3.6m ebit, negative returns from $200m plus invested in them by Hills.
    And they can't sell them, any guesses why ????

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    1. Thanks KC,
      Orrcon did have write offs etc - but looks like Fielders lost also - plus sales for 2011/2012 down to $250 million?? That means the big drops have been in SA & WA (QLD a write off) - why do Hills put up with this? Or a better question maybe be why do Hills shareholders put up with Hills management of Fielders?
      Something will break in this - and it will be between Lysaght & Fielders in Gold or Silver positions!

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    2. Now Bluescope is debt free they might go on a shopping spree - Fielders may have a new owner very soon. The loyal Fielders employees deserve an end to the uncertainty and some stability

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    3. KC,

      Do you think this is a possibility - the purchase price would only be around $50 million? They may want the Aramax mills though!

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