BlueScope Steel's first-half earnings are still expected to be lower than what they were in the second half of 2017/18 because of rising costs, outgoing chief executive Paul O'Malley has confirmed.
Australia's largest steelmaking business in August offered a rare cloudy outlook, flagging underlying earnings in the first half of 2017/18 would be around 80 per cent of earnings in the second half of the financial year.
At the time, it had attributed the deterioration to a number of major factors, including higher scrap prices in the US, lower steel margins in the domestic market and escalating energy costs for weighing on growth.
"While there has been some movement in the macroeconomic indicators since then, this is not expected to have a material impact on financial performance in the first half of FY2018," Mr O'Malley told shareholders at the company's annual general meeting on Wednesday.
He again blamed energy prices as a major issue for the business, saying Bluescope's electricity costs will have nearly doubled over the two years to June 2018, while gas costs would have increased by a third over the same period to $32 million.
While Mr O'Malley applauded the federal government's recent intervention in the gas market, he called for a 10-year energy transition policy that addresses energy prices and reliability.
"Debating future coal or gas, hydro, nuclear or renewable energy supply, is fine - so long as there is a sensible transition over the next 10 years that secures our everyday life and living," he told shareholders.
"Australia can't afford to focus only on future initiatives and possibilities, - the Finkel recommendations, renewables-only, the future smart technologies - because they aren't here yet."
The country would be able to retain its economic competitiveness only if it also focuses on fundamental baseload energy that powers homes, factories, schools and hospitals, he said.
Mr O'Malley's comments comes even as peak lobby group, the Business Council of Australia, on Wednesday demanded a permanent seat at the table when alternatives to a clean energy target are considered.
The business community is being hampered by not knowing what the carbon price or mechanism will be in 2026, which has had a chilling effect on investment, the council's head Jennifer Westacott told ABC radio.
By 1347 AEDT, BlueScope Steel shares were down 0.61 per cent at $11.45 each.
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