BlueScope leads ASX tax cut winners

MERCURY. NEWS. Bluescope Series in the Painting and Finishing department. Pic of Gary Meta . Pic by sylvia liber. June 2, 2016Steel group BlueScope, rubber products maker Ansell, share registry giant Computershare and investment firm Navigator Global Investments have handed investors a little Christmas bonus by tipping US President Donald Trump’s tax cuts will boost their earnings.
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The Republican-controlled US House of Representatives gave final approval to a sweeping tax bill that includes cutting the company tax rate from 35 per cent to 21 per cent in the largest overhaul of the US tax code in 30 years.

President Trump is expected to sign the bill into law as early as this week.

BluesScope shares jumped 4.4 per cent in morning trade to $15.12 after it announced a profit upgrade based on strong steel prices and the US tax cut.

‘s largest steelmaking business now expects underlying earnings for the six months to December 31 will be around $460 million, up $40 million on its previous estimate made in August.

The increase is mainly on account of higher steel prices and volumes in the local market, a $20 million bump up in contribution from export coke and improved productivity.

It will also recognise $12 million of previously impaired tax assets at its Indian joint venture Tata BlueScope Steel.

BlueScope said the tax change, which is set to start on January 1, will result in a 7 per cent decrease in federal tax on its US earnings in FY2018 and 11 per cent in subsequent years.

The benefit will be partly offset by a toll charge on foreign earnings, but this is not expected to be material, it said.

Ansell expects the reduced tax rate

Computershare said it expected a one-time benefit to its 2017-18 statutory net profit after tax associated the reduction of the company’s US net deferred tax liability position.

Navigator reported that the new tax rate will have a minor effect on current year earnings, but it expects to “benefit significantly” once it has utilised its retained tax losses.

– WITH AGENCIES