EO SAYS: "Look beyond the short term for underlying drivers of steel growth."

BlueScope Steel today advised that its unaudited first quarter results show a very strong performance with underlying Net Profit After Tax of approximately A$430 million.

Managing Director and CEO, Mr Paul O'Malley, said, "BlueScope Steel has had a very good start to FY09 due to strong global steel demand and prices. In this opening quarter, the business outperformed the first half result of last year, despite increases in iron ore, coal and scrap prices. However, current economic conditions suggest a challenging second half."

IMMEDIATE ACTION:
"Our focus at BlueScope is to maximise value and preserve financial flexibility. Our priorities are a continuing strong balance sheet, preserving gearing in our target range and improving our strong cash position. We are also taking further action to cut costs, tightly manage working capital, optimise our manufacturing assets and work closely with our customers.

"BlueScope is also driving synergies from its recent US and Australian acquisitions. Our confidence in our business means that in the second half of FY09, we will embark on the Blast Furnace No 5 reline and sinter plant upgrade projects at Port Kembla Steelworks. These investments will position our company to take best advantage of the eventual improvement in economic conditions. While these two major engineering projects will see a planned reduction in production in the second half, they will deliver cost and volume benefits upon completion."

GLOBAL OUTLOOK:
Commenting on the current economic climate and the second half FY09 outlook, Mr O'Malley said that while BlueScope expects the significant pressures in the world economy to impact second half results investors should look beyond the short term for underlying drivers of steel growth.

"A range of independent data points to the ongoing urbanisation and industrialisation in China. These will be the principal drivers of growth and they still have a long way to run. In addition, the global steel industry is responding to the current environment with production cuts. Combined, these factors are likely to produce beneficial knock-on effects for the global steel sector and Australia," Mr O'Malley said.