Yes. No. Obviously there's the macro headwinds are quite substantial out there. Yep. Loose. So still able to defy all
that and deliver these record profits. Tell us how. Yeah. Look I'm in a really strong result for BlueScope the best
result that we've had in our 20 years as a listed company. What we've seen across our footwear footprint has been really quite
strong demand and we saw the run up in steel prices particularly in the US in the last 12 months.
The cost position that we have our business in we're very focused on making sure we keep our costs low has put us in a
position where we've been able to take advantage of those macro tailwinds. And that's really what's what's driven this record
result for the full year. And having said that though I mean we talk about the headwinds.
Obviously there's been supply chain issues and the impact of Covid-19 rising labor input costs as well. I wonder what what
does the outlook mean for you then. Is it still as optimistic and you continue on with these sort of record gains here or is
this as good as it gets for BlueScope. Well I think certainly we're forecasting the outlook for the
first half of the second year to be not at the levels we're at. And that's largely driven by pricing. So what we saw over the
last 12 months was hot rod coal prices. Prices almost reaching 2000 US dollars a tonne was an extraordinary level of pricing.
That's a level of pricing that we've never seen in the history of the industry. So we weren't expecting or requiring it to stay
at that level. We were certainly in a position to take advantage of that. Pricing is now back around eight hundred US dollars a
tonne. That's still a very healthy price in terms of the long run average which is more like six hundred dollars a tonne. So
we've got into an eight to nine hundred million dollar A but for the first half of the new financial year which in historical
terms if you weren't looking at it immediately after the record result we've just posted is still a very healthy result for
BlueScope. And Mark your guidance as far as cash flow is concerned given
the CapEx that you have announced in your in your press release here. Tell us a little bit more about the seeds you're planting
for the future. Yeah it's very good question. I mean we think we think about
certainly the cash we generated this year one point seven billion dollars on the back of those very high prices. As I
mentioned earlier we think carefully about how we allocate our capital our cash. So we have a range of capital projects that
we're focused on. The blast furnace re line and a new metal coating line in Australia. We made an acquisition in the US just
before the close of the financial year for a coating business. And of course the money that we spent on on the expansion at our
North Star facility mini mill in North America. So we think carefully about that profile of projects that we have
internally. There's money that's required to be spent for us to continue to decarbonise our business and meet the ever
increasing targets around greenhouse gas emissions. And then we also think about the cash that we generate in terms of returns
to shareholders and our board have enough confidence in the business model on the outlook that we've announced a 25 cent
final dividend. And also on up to 500 million dollar buyback. So we're very mindful of what's happening in the market. Our
internal opportunities but also returns to shareholders. Mark I know you don't have really a big sort of exposure to the
Chinese economy as a general sort of rule. But certainly what happens there affects certainly the industry based on what we're
seeing as far as the weakness in the economy where do you think that puts the outlook for the entire industry.
China has a significant impact in terms of the Asian markets in particular. So we watch that very closely. I think the signals
that have come out of China in the last few years around their challenge to meet carp decarbonization reducing the amount of
exports rather than bringing in high cost imports and then selling product as low cost exports. I think that's been
fundamentally and structurally good for the steel industry in the Asian region. So we watch that data quite closely.
You mentioned a lot about sustainable steel making to Mark and I wonder do you accept that when it comes to the long term that
hydrogen will basically replace coking coal eventually and the steel making process. And how long is that going to that
transition going to take. This is an enormous challenge for the steel industry this is not
just a BlueScope problem by any stretch of the imagination. This is a global steel industry problem. There's not technology
that's currently technically or commercially viable that sees us in a position where we can decarbonise. We're incredibly
optimistic about the opportunities that hydrogen provides. But I'm also mindful and I don't want to sound like a nice guy. I'm
also mindful that there is just some time and a massive amount of investment that's going to be required to get us to a
position where we have an eco system around hydrogen. We have enough renewable energy. We have the remote raw materials that
are required for us to do carbon ISE our industry. We're a hard to abate industry. There is not a technical solution that's
available at this stage but we're all working very hard on it. And at BlueScope we've made a significant commitment both in
terms of people resources and capital to head down that decarbonisation path. My view is I think we're at least 10 years
away from the hydrogen eco system being in a position where it can have a material impact on the steel industry.
Mark just one of the other things too that's been hounding the industry and not just yours. Pretty much virtually every
industry out there there's just these supply constraints. I wouldn't say supply chain supply constraint you know entered the
energy squeeze in Europe. As far as inflationary pressures to your business what are you seeing and what do you think
persists. There's no doubt there's some inflationary pressures we're
seeing that in labor across our footprint. We're seeing it in some consumables. We're seeing it in freight. Now businesses
have been heavily disrupted over the last 12 months with isolation restrictions around employees not coming to work our
customers restrictions around their people being in isolation. So there's no doubt we've seen an impact in our business from an
inflationary perspective over the last 12 months. The supply chains have remained very tight. That's manifested itself in
better pricing. So some of that inflationary impact has been offset by our ability to pass that through in price increases.