BlueScope, Downer abandon earnings forecasts
Steelmaker BlueScope and contractor Downer have joined the growing list of Australian corporates suspending guidance.
Steelmaker BlueScope and contractor Downer have joined the growing list of Australian corporates suspending earnings guidance in the wake of the coronavirus pandemic.
BlueScope has withdrawn its outlook for the second half of the 2020 financial year, citing the unprecedented environment and economic uncertainty. It had previously forecast an earnings performance like that achieved in the first half of $302.4m.
Chief executive Mark Vassella said while performance during the half so far had been in line with expectations, a decline in sentiment and economic outlook had taken hold due to COVID-19 over the last few weeks.
Car companies General Motors, Ford and Fiat Chrysler have agreed to temporarily shut down production in the US, Mexico and Canada to limit the spread of coronavirus.
“Most recently we have experienced business interruption due to national shutdown in Malaysia, and overnight it was announced that a number of automakers in North America would temporarily cease production. It is not yet clear what impact this will have on North Star’s dispatch volumes,” Mr Vassella said.
BlueScope had net debt of $47m as of December 31, with $358m net cash and liquidity of $2.5bn.
Its shares closed 4.15 per cent lower at $9.01 and are now off 40 per cent since the turn of the year.
Contractor Downer also withdrew its earnings guidance for the 2020 financial year, citing the uncertainty of the coronavirus spreading and said it was cutting costs across the company.
Chief executive Grant Fenn said demand for the vast majority of Downer’s services would remain strong with its business tilted toward government and critical infrastructure.
“We are making hard decisions due to the unprecedented impact of this virus, and these decisions have been taken to position Downer for the future when the COVID-19 situation eases.”
Downer had $515m cash as of December 31, with undrawn facilities of $1.14bn and $50m of debt.
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