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Sims posts $0.5 billion loss due to difficult metals business

Date: Fri, 17 Feb 2012 | Author: Paul Sanderson

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Metal recycling giant Sims Group made a huge loss in the first half of the fiscal year 2012.

The company announced revenue of $4.6 billion (£2.91 billion) and a net loss after tax on a statutory basis of $556.5 million (£352.2 million).

In the first half of the fiscal year 2012, the company’s total scrap intake and shipments were 7.3 million tonnes and 7.2 million tonnes respectively, which represented a 10 per cent increase on the prior corresponding period.

In Europe, scrap intake and shipments in the region increased by 25 per cent and 15 per cent respectively on the prior corresponding period. Intake and shipments were each circa 0.8 million tonnes during the first half of fiscal 2012.

Sims Group chief executive Daniel W.Dienst said: “Our European business is generating strong revenues and solid earnings due to the success of our electronics recycling business, Sims Recycling Solutions.

“Our traditional metals business in the UK struggled due to tight scrap flows and ferrous margins, akin to our experience in North America.

“At the end of September, we announced the acquisition of S3 Interactive Limited. This acquisition is recognition of the growing role the asset management and recycling of smart phones, tablets and handheld electronics will play in the electronics recycling industry. This is another example of an acquisition that fits well strategically with our already successful platform in the region and that provides us access to broader product categories. We also completed another tuck-in acquisition for the traditional UK metals recycling business in the first half of fiscal 2012.”

He said that ferrous markets “remained choppy” as Sims started the second half, but intake has begun to recover.

Dienst added: “December and January saw deep see ferrous export prices firm, albeit with some softening in early February. Deep sea ferrous prices have moved higher more recently. Ferrous prices came off their first half highs due to supply considerations, largely on the back of an unusually warm northern hemisphere winter, which has not disrupted flows moving to market. Freight rates remain conducive to international trading.

“Non-ferrous trading markets are liquid with higher prices as factors such as fears of China cooling and political uncertainty there subside. A recent recovery in base metal prices since December has been supportive of better volumes and margins.”

 

Category: Recycling
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