BlueScope, which has raced to cut costs to offset weakening demand and a slump in steel prices, said it now expects underlying earnings of around $230 million for the six months ended December 31.

It’s previous guidance for underlying earnings was $180 million for the half year.

The news cheered investors, and by 1020 AEDT, BlueScope shares were trading at $4.95 each, up 57 cents or 13 per cent.

“The stronger performance has been driven largely by earlier delivery of cost reductions, growth in Australian domestic dispatches and better margins,” the company said in a statement on Friday.

BlueScope is slated to report half-year earnings on February 22.

The company, however, on Friday also flagged an impairment charge of $570 million in its half-year accounts, joining a slew of sector companies that have been impacted by the sharp fall in iron ore and steel price forecasts.

The writedowns include $190 million in the Australian Steel Products division, $350 million in its New Zealand and Pacific Steel business and $30 million by way of carried forward tax assets.

The company has cut jobs, frozen pay for remaining workers and sought a three-year tax break from the NSW government to keep its Port Kembla steelworks running and to achieve its target of $200 million in cost savings over two years.

It has also made cost reductions in its New Zealand and Pacific steel divisions.

On Friday, BlueScope also said it would add to its statutory profit after boosting the value of the US-based North Star Steel business.

The company acquired the remaining 50 per cent stake in the business from partner Cargill in October for $US720 million, and said the subsequent revaluation of assets had necessitated the write-up in value.