BlueScope Steel, Australia's biggest steelmaker, said its full-year profit doubled on strong global demand for its flat steel products, and forecast continued healthy demand for 2008.
BlueScope, which has operations in Australia, Asia, the Pacific and the United States, posted a net profit of A$686 million (US$549 million) for the year to June 30, up from A$338 million a year earlier.
That was below market forecasts of A$707.2 million, according to a Reuters Estimates survey of 14 analysts.
The company's 2006 earnings were held back by higher raw material costs and one-off costs related to plant closures. Excluding one-off items, last year's profit was A$470 million.
"This year, the global steel market was very strong, with the forecast for global steel demand remaining positive," the company said in a statement. It said China, the U.S. and Europe were driving the healthy outlook.
The company said it had substantial volume growth in Asia in 2007 as new operations in China, Vietnam, China and India were commissioned and ramped up. BlueScope said the North American commercial industrial construction market remained strong for its Butler business, which has no residential exposure.
In April, BlueScope agreed to pay A$700 million to acquire the distribution business of Smorgon Steel, as part of consolidation among Australia's three steelmakers, when OneSteel took over Smorgon.
OneSteel said on Monday that its merger with Smorgan had been completed.
BlueSteel makes flat steel products for the building and construction sector, while OneSteel is now the dominant producer of long steel products such as bars, wires and pipes.
Earlier this month, BlueScope appointed an internal candidate, finance director Paul O'Malley, as its new chief executive. He takes over on Nov. 1 from Kirby Adams, who has led the company since it was spun off from BHP Billiton in 2002.
BlueScope Steel has been the subject of persistent takeover speculation in recent months, with Arcelor Mittal, the world's largest steelmaker, tipped as a potential buyer.
BlueScope shares have risen 17.2% this year, partly on takeover speculation. Its shares have also been boosted by strong global demand driven by industrialisation in China, despite rising raw material costs for iron ore, coking coal and scrap metal.