OneSteel Limited (ASX:OST) has blamed a strong Australian dollar and softer iron ore prices for cutting into its expected first half earnings.
The steel maker now expects to deliver a first half net profit of between $55 million and $75 million, compared with $116 million achieved the same time last year.
The company is also expected to take an extra $20 million hit, due to transaction costs relating to its $346 million acquisition of WPG Resources Limited (ASX:WPG) iron ore assets.
OneSteel says the price of iron ore has now fallen about 30 per cent from $US170 per tonne three weeks ago.
A further update on trading conditions will given at OneSteel’s annual general meeting on November 21, 2011.
In the 2011 financial year OneSteel posted an 11 per cent fall in its net profit, coming in at $237.5 million.