BlueScope Steel Ltd. (BSL), Australia's largest steelmaker, announced today that it will report a full-year loss as the strengthening Australian dollar cuts the price of competing imports and the value of offshore earnings.

The company said that after a complete detailed review of business performance to the end of April, it is now expected the second half reported earnings for FY 2011, will result in a "small reported net loss after tax."

BlueScope said that there have been three major contributing factors. "First, the strengthening of the Australian dollar (versus US$), which has had negative effects on steel export sales, on the translation of offshore earnings an on Australian domestic commoditised steel sales (which have an underlying US$ sales price). Secondly, global steel prices which fell in April. Thirdly, demand weaknesses in the domestic distribution and pipe and tube markets."

BlueScope made profit of A$126 million last financial year. But it incurred a A$55 million net loss after tax for the first half FY2011. It warned after its first-half results that the strengthening of the Australian dollar to US$1.00 from US$0.80 was already costing around A$200 million a year to its net profits.

BlueScope had previously said it was likely to break even in the second half of the fiscal year.

BlueScope's announcement follows a profit warning on Monday from smaller competitor OneSteel Ltd. (OST), which announced downgrade to full-year profit guidance to around A$232 million from A$270 million. OneSteel said last week that the revision is due primarily to the impact of the rapid appreciation of the Australian dollar, including an adverse impact on domestic steel margins and volumes and on iron ore Australian dollar revenue.