British Steel has reported a Q1 profit of £21 million (EBITDA) and announced the biggest single investment in its manufacturing operations for a decade.
In its second annual trading update, British Steel said its turnaround remains firmly on track and reported a significant long-term investment plan to support the business for years to come with a £50 million to be invested upgrading the Scunthorpe Rod Mill. An addition, £40 million has been committed to other capital expenditure in FY19 to maintain and improve the existing asset base with a further £500 million of projects being pursued.
British Steel Executive Chairman Roland Junck said: “Our transformation remains firmly on track and continues apace with unprecedented levels of investment going into the business. Without the unique blast furnace chill last summer – the impact of which was widely reported by media – we’d have exceeded our year 2 target which demonstrates the growing strength of our business.”
“This strength is why a number of leading financial institutions continue to provide us with additional financing to support our investment and growth plans. This is not only enabling us to improve our plant, products and services – as demonstrated with our rod mill investment – it’s allowing us to expand our portfolio by making strategic acquisitions such as FNsteel.”
“Increased raw material costs and fluctuating steel prices continue to be a challenge. It’s important safeguarding action is taken to prevent the dumping of cheap steel into Europe following the imposition of steel tariffs by the US. However, we remain in positive talks with the Government, and our other stakeholders, and are confident about our future.”
“Our order book is strong and we’ve the capacity and capability to play a significant role in major infrastructure projects such as HS2 and the Heathrow expansion. We continue to invest in our people and products, remain focused on reducing the cost of liquid steel and are growing into new markets across the globe. With the support of our employees we’ve achieved a great deal in a short space of time and while a lot of hard work lies ahead, we’ve made significant progress towards building a sustainable future.”
To support its growth plans, British Steel has recently secured £90 million of new financing from White Oak Asset Finance, an affiliate of White Oak Global Advisors, LLC. British Steel’s bank financing is provided by a syndicate led by PNC Financial Services UK Ltd.
