BlueScope Steel Annual Profit Slumps on Lower Steel Prices, U.S. Write-Down — Update

Base metals are mixed in early Asian trade. Global trade uncertainty caused by U.S. tariffs is likely to drag base metals for the time being, ANZ commodity strategists say in a note. China's weak real estate sector may also continue to weigh on market sentiment after the country's Politburo meeting in late July failed to deliver any significant or immediate stimulus measures for the sector. The three-month LME copper contract is up 0.1% at $9,779.50 a ton, while that of aluminum is 0.4% lower and nickel is down 0.2%. (amanda.lee@wsj.com)

Gold prices edged up to $3,340 per ounce on Monday but remained near its lowest level in over two weeks, as prospects of easing geopolitical tensions dulled the metal’s safe-haven appeal.

While Friday’s meeting between US President Donald Trump and Russian President Vladimir Putin failed to deliver a breakthrough on a ceasefire, Putin agreed to allow the US and Europe to provide Ukraine with robust security guarantees as part of an eventual deal to end the war.

Trump is scheduled to meet Ukrainian President Volodymyr Zelensky and European leaders later today to strike a quick peace deal.

Meanwhile, investors are awaiting the release of the Federal Reserve’s latest meeting minutes on Wednesday, which could shed further light on the decision to leave interest rates unchanged.

Markets will then turn their focus to Fed Chair Jerome Powell’s remarks at the central bank’s annual Jackson Hole symposium later this week for fresh clues on the policy outlook.

Gold edges lower in the early Asian session amid prospects of easing geopolitical tensions that typically reduce the safe-haven appeal of the precious metal. Although Friday's meeting between U.S. President Trump and Russian President Putin ended without any breakthrough, Trump told European leaders that he was open to offering U.S. security guarantees to Ukraine, according to several European officials. Trump said Putin had accepted that any peace in the Russia-Ukraine conflict would need to include the presence of Western troops in Ukraine. Spot gold is 0.2% lower at $3,327.58/oz. (ronnie.harui@wsj.com)

Brent crude futures hovered below $66 per barrel on Monday, extending losses from the prior session as markets focused on the meeting in Washington between US President Donald Trump and Ukrainian President Volodymyr Zelenskiy aimed at advancing a peace deal with Russia.

The talks will also include European Commission President Ursula von der Leyen, French President Emmanuel Macron, and NATO Secretary General Mark Rutte.

Trump said he would press Zelenskiy to agree to a quick settlement following his Friday discussions with Russian President Vladimir Putin, which centered on Moscow’s demand for Ukraine to cede territories.

He also signaled little urgency in imposing penalties on Russia and countries purchasing its oil, softening his earlier stance during their summit in Alaska.

Oil prices have fallen more than 10% so far this month, pressured as well by concerns over the economic fallout from Trump’s tariffs and rising OPEC+ supply.

Oil edges lower in the early Asian session amid prospects of easing tensions in the Russia-Ukraine conflict. These prospects have diminished risks of additional oil supply disruptions, ANZ Research analysts say in a research report. Although the meeting between the U.S. President Trump and Russian President Putin ended without any agreement, there's probably sufficient progress to suggest that supply risks are lower, the analysts say. Both presidents agreed that the U.S. would be able to offer Ukraine security guarantees, the analysts note. Front-month WTI crude oil futures are down 0.2% at $62.67/bbl; front-month Brent crude oil futures are 0.3% lower at $65.63/bbl. (ronnie.harui@wsj.com)

By David Winning

SYDNEY--A2 Milk raised hopes of an expansion in profit margins as it doubled down on Chinese demand for infant formula by buying a manufacturing plant in New Zealand's North Island.

A2 Milk on Monday guided to an earnings before interest, tax, depreciation and amortization margin of between 15% and 16% in the 12 months through June, 2026. If achieved, that would be stronger than the 14.4% Ebitda margin for fiscal 2025.

A2 Milk also said it expects revenue growth from continuing operations of a high single-digit percent in the current 12 months.

The outlook was provided alongside an overhaul of its supply chain that included the acquisition of an integrated nutritional manufacturing facility in Pokeno for around 282 million New Zealand dollars (US$167.1 million) from a unit of China Mengniu Dairy. A2 Milk plans to invest NZ$100 million in raising capacity at the site, and employ more than 100 additional people over time.

"The acquisition of the Pokeno manufacturing facility and related products represents a pivotal moment for The a2 Milk Co. and the execution of our supply chain transformation strategy," said Chief Executive David Bortolussi.

A key attraction of the deal is that it brings two product registrations for the China-label infant formula market, A2 Milk said.

At the same time, A2 Milk said it would sell interests in the Mataura Valley Milk business to Open Country Dairy. A2 Milk said it expects to generate net proceeds of some NZ$100 million from the MVM deal, but will also recognize a loss on sale of around NZ$130 million.

A2 Milk signaled the deals will lead to a one-off return for shareholders.

"With greater certainty over future capital needs, the board is pleased to announce its intention to declare a fully franked and unimputed special dividend of NZ$300 million after obtaining regulatory approval to bring the new China label registered products under The a2 Milk Co. brand and completion of the MVM divestment," Chair Pip Greenwood said.

A2 Milk reported a net profit of NZ$202.9 million for fiscal 2025, up from NZ$167.6 million a year earlier. A2 Milk reported annual revenue of NZ$1.90 billion, up 14% and broadly in line with guidance for low to mid-double digit percent growth that was provided to investors in February.

Directors of the company declared a final dividend of 11.5 New Zealand cents a share. A2 Milk's policy is to pay out 60-80% of net profit as dividends once one-off items are excluded.

In fiscal 2025, A2 Milk said it had expanded its share of the market in China to record levels. Infant milk formula sales rose by 10% overall, driven by 17% growth in English label sales.

A2 Milk has been able to grow its share of China's infant formula market in recent years despite facing the headwind of a declining population. China's fertility rate--the number of children a woman has over her lifetime--is around one now, one of the world's lowest.

Chinese officials have recently been rolling out new initiatives to drive the birth rate higher. Beijing plans to pay a basic national subsidy of 3,600 yuan (about US$500) per child each year until the age of 3, according to a central government decree released recently on local government websites.

Write to David Winning at david.winning@wsj.com