BlueScope shares soar on higher earnings outlook

The group’s shares lifted as much as 17pc as it raised its earnings forecast.

BlueScope CEO Paul O'Malley will formally announce its results on August 22.

BlueScope Steel shares have soared as much as 17 per cent after the firm sharply upgraded its earnings projections for the recently completed 2016 financial year due to the realisation of higher steel prices.

The new forecast has the group delivering pre-tax earnings of $340 million for the second-half, as against earlier expectations for $270m.

The revision should see pre-tax profit for the full-year hit $570m.

The stunning 26 per cent upgrade to second-half projections comes less than two months after a positive adjustment of a similar magnitude.

In May, the firm said earlier expectations for a second-half profit of $209m were too pessimistic, leading to the updated $270m projection.

“The improved performance since the company’s last update is mainly due to higher margins across our international businesses, in particular North Star and Steelscape, and the turnaround in Asian region steel prices and their favourable impact on estimated year-end inventory net realisable value provisions in Australia,” BlueScope said in a statement.

It added net debt as at June 30 would come in around $780m, a $593m reduction through the second-half due to improved operating cash flow.

The firm will formally announce its results on August 22.

At the close of trade, BlueScope shares were 7.24 per cent stronger at to $7.85, against a 0.43 per cent rise in the benchmark indes. They had touched a high of $8.55 in the buying rush that followed the announcement.

Ahead of the late afternoon statement its shares were up just 0.8 per cent.