Bluescope Steel

Annual Report 2003

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at June 2003

 
Notes
2003
$m
2002
$m
Current assets      
      Cash assets  
91.0
98.7
      Receivables  
639.6
2,114.3
      Inventories  
639.4
257.8
      Other financial instruments  
4.1
2.2
      Other  
17.6
9.4
Total current assets  
1,391.7
2,482.4
       
Non-current assets  
      Receivables  
10.8
10.8
      Inventories  
58.2
23.4
      Investments accounted for using the equity method  
151.6
146.3
      Other financial assets  
4.5
0.2
      Property, plant and equipment  
3,085.6
1,065.1
      Deferred tax assets  
37.3
19.2
      Intangible assets  
4.5
0.7
      Other  
8.9
9.5
Total non-current assets  
3,361.4
1,275.2
Total assets  
4,753.1
3,757.6
       
Current liabilities  
      Payables  
493.0
351.2
      Interest bearing liabilities  
101.5
2,279.6
      Current tax liabilities  
108.0
2.8
      Provisions  
258.7
100.8
      Other  
8.1
3.9
Total current liabilities  
969.3
2,738.3
       
Non-current liabilities  
      Interest bearing liabilities  
66.4
94.5
      Deferred tax liabilities  
395.1
103.5
      Provisions  
231.2
49.6
Total non-current liabilities  
692.7
247.6
Total liabilities  
1,662.0
2,985.9
Net assets  
3,091.1
771.7
       
Equity  
      Parent entity interest  
            Contributed equity  
2,182.1
164.0
            Reserves  
(91.2)
182.9
            Retained profits
961.4
387.7
      Total parent entity interest  
3,052.3
734.6
      Outside equity interest in controlled entities  
38.8
37.1
Total equity  
3,091.1
771.7

The above consolidated statement of financial position should be read in conjunction with the accompanying notes and discussion and analysis.

DISCUSSION AND ANALYSIS OF CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In preparation for the separation from the BHP Billiton Group, BlueScope Steel Limited acquired all the issued capital of BHP Steel (AIS) Pty Ltd from BHP Billiton Limited on 3 July 2002. BHP Steel (AIS) Pty Ltd is a fully integrated manufacturer of flat steel products for distribution to Australian and export customers throughout the world. In addition, a wholly owned subsidiary of BHP Steel (AIS) Pty Ltd manufactures flat and metallic coated steel products in New Zealand. These entities include the Port Kembla Steelworks, Packaging Products and New Zealand Steel operations. Details of the acquisition are as follows:-

 
$M
Cash
56.1
External receivables
277.3
Inventories
397.0
Plant & equipment
2,157.5
Other financial assets
4.3
Other assets
29.1
External payables
(284.9)
Deferred tax liability
(309.2)
Other provisions
(231.5)
Net related party loans
(1,323.5)
Cash consideration
772.2

On 1 July 2002, the BHP Steel Group drew down $550 million of external long term debt and $15 million of short term debt to partially repay related party debt owing to the BHP Billiton Group. The BHP Billiton Group converted the balance of related party loans to equity in BHP Steel Limited.

Other key notes on balance sheet movements, other than as noted, are as follows:

Assets and Liabilities

  • An increase in receivables due to higher sales volumes and prices.
  • An increase in provisions due to the recognition of costs associated with the required company name change, redundancies and other employee related costs.
  • An increase in provision for income tax in line with increased profits from Australian operations.
  • The repayment of $540 million of external borrowings as a result of the strong operating results.

Equity

  • On the release of the December 2002 half year results the company announced that it would commence a 10% on-market buyback of share capital, commencing 14 March 2003. The total cost of the buyback to 30 June 2003 was $27.3 million, with 8,314,051 shares bought back.

Relationship between debt and equity

The current gearing ratio, calculated as net debt over net debt plus equity, is 2.4%. The gearing ratio upon the separation of BHP Steel Limited from the BHP Billiton group was 17.7%. The improvement in this ratio has been driven by strong operating results which has enabled the subsequent reduction in debt.

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