Scrap Processors
September 24, 2024
CRU: Sims hails strong start to financial year
Global ferrous and non-ferrous recycler Sims Limited is forecasting earnings before interest and tax (EBIT) of around A$55 million (US$37.2 million, €33.5 million) in fiscal Q1 to September. That compares with A$72.6 million for the whole of 2024.
The company says all of its metal businesses are contributing to the good start to the fiscal year, but particularly North America Metal (NAM) which is estimated to deliver A$29 million in EBIT compared to A$12 million in fiscal Q4 last year and a loss of A$15 million in fiscal Q3.
“NAM’s recent performance is encouraging, driven by the effective execution of its revised strategy to focus on margin, including buying more unprocessed material and targeting the most favorable markets. These disciplined actions have delivered tangible results,” the Sydney-headquartered group said.
But the Australia and New Zealand business continues to face challenging market conditions, impacted by increased Chinese exports into Asia and a slowdown in the domestic market. Its expected EBIT of A$13 million for Q1 is below the run rate in H2 last year, Sims added.
In accompanying comments CEO and managing director Stephen Mikkelsen draw attention to how the company has refocused its portfolio.
That includes agreeing to sell its UK Metal (UKM) to London-headquartered recycler Unimetals Group for around £195 million (US$257 million, €231 milion), subject to a net asset value adjustment on closure. That is expected by the end of September, provided regulatory and customary completion conditions are met. UKM operates 28 sites including four shredders and three ports.
