UPDATE 2-Australia's OneSteel H1 profit hit by costs, imports

(Adds fund manager comment, details)

By Richard Pullin

MELBOURNE, Feb 19 (Reuters) - OneSteel Ltd (OST.AX: Quote, Profile, Research, Stock Buzz), Australia's second-largest steel company, missed analyst forecasts with a 6 percent rise in half-year profit, hurt by import competition and higher costs, sending its shares lower.

OneSteel, which makes long steel products such as bars, pipes and rails, said it was also affected by a stronger Australian dollar, but forecast a fall-off in import competition and improved trading conditions in the second half.

The steel company stuck with its previous earnings guidance for the full-year.

OneSteel shares fell as much as 7.2 percent, but had recovered some poise as the broader market recovered to trade 4.3 percent lower at A$6.87 at 0225 GMT.

"Investors and fundies out there are so used to the last two or three years of very strong returns," said Lucinda Chan, division director at Macquarie Equities. "To not surprise on the upside is almost a disappointment."

Chief Executive Geoff Plummer said sales and revenue were up strongly, benefiting from a four-month contribution from Smorgon Steel, which would make a stronger contribution in the second half.

Plummer said cost savings and efficiencies from the Smorgon takeover would rise to A$41 million in the first year of the acquisition, from A$25 million previously announced.