BlueScope Steel on Monday announced a dividend of 65 cents per share, more than double the 30 cents per share analysts had predicted, after a big jump in first-half earnings.
The Port Kembla steelworks owner delivered a net profit for the first half of 2025/26 of $390.8 million, up 118 per cent from $179.1 million a year ago.
The result was underpinned by a four per cent lift in sales revenue to $8.2 billion, setting the group up for an 81 per cent increase in underlying earnings before interest and tax to $557.5 million.
BlueScope shares finished lower on Monday, dropping 2.7 per cent to $28.37, even after new chief executive Tania Archibald promised more shareholder returns going forward.
Ms Archibald, presenting her first set of results, said BlueScope intended to lift its shareholder distribution target to return 75 per cent of free cashflow, up from its previous target of 50 per cent.
BlueScope was nearing the tail end of a major project pipeline, she explained.
"We can see the back end of that unusually large and long-term capital program starting to ramp down," Ms Archibald said.
"As we ramp down the spend, it's ramp up the returns to shareholders.
"We felt it was a nice thing to signal as part of the CEO transition."
Ms Archibald credited previous chief Mark Vassella's investments in capacity expansion, which led to the possibility of increased shareholder returns.
"Clearly, what we're trying to signal here is that we want to place more value into the hands of our shareholders. Our shareholders have been very patient for a long period of time as we've undertaken these very significant investments," she said.
BlueScope shares however finished at their lowest level since the $13.2 billion takeover offer from the Stokes family-controlled SGH and Steel Dynamics of the US was first disclosed in early January.
At the time the offer equated to $30 a share, although the pair later signalled their offer had effectively fallen to $29 per share after BlueScope announced it would hand back $438 million to shareholders.
SGH chief executive Ryan Stokes recently said the proposal was full and fair, although he was comfortable about moving on if BlueScope shareholders didn't see it that way.
BlueScope on Monday forecast its second-half underlying earnings before interest and tax to be between $620 million and $700 million - an improvement on the first half.
RBC Capital Markets analyst Owen Birrell said it was a solid result from BlueScope, with an interim dividend well ahead of consensus expectations.
In addition to the Port Kembla steelworks in southern NSW, the company has the North Star operation in the US state of Ohio, which uses scrap to produce hot-rolled steel at low cost.
It has other assets in New Zealand and Asia.
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