Sims Metal Management (SimsMM) has issued a warning that it expects profits in the first half of its financial year to be 20 per cent lower than previously forecast.
On 15 November at its Annual General Meeting, the metal and WEEE recycler forecast profits of between $110 to $120 million, but it now expects these to be up to a fifth lower due to challenging market conditions.
However, it expects more positive economic data will see improvement in conditions in the second half of its financial year.
In a statement, SimsMM said: “This updated earnings guidance relates primarily to SimsMM’s assessment of recent intake volumes and its anticipated shipping programme, particularly for deep sea ferrous products, forecasted for December 2012.
“As indicated at the Annual General Meeting, SimsMM anticipated relatively weak intake volumes across all regions coupled with, until recently, tepid demand by deep sea ferrous buyers.
“While recent positive economic signals in the US, including declining unemployment, positive consumer confidence data and increasing industrial production, is encouraging, the direct benefit to intake volumes and metal recycling margins typically follows at a lag which will not benefit SimsMM through the 31 December 2012 period.”