Sims reports increased profits despite lower sales figure
Sims reports increased profits despite lower sales figure
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Australia-based Sims Ltd., which has metal and electronic scrap recycling operations in that nation, North America and Europe, has reported a 480 percent increase in earnings before interest, taxes, depreciation and amortization (EBITDA) in the first half of its 2021 fiscal year, which covers the second half of the 2020 calendar year.
The company’s increased profits compared with its first half of its 2020 fiscal year (the second half of 2019) occurred despite a nearly 10 percent decline in sales revenue. Sims Ltd. attributes “COVID-19 impacts” for volume levels in the second half of 2020 it describes as being “at 85 percent of average fiscal year 2019 monthly volumes.”
In the July to December 2020 time frame, Sims Ltd. posted EBITDA of $177.1 million, rising 480 percent from the $30.5 million in profits in the second half of 2019. The profitability occurred despite a 9.5 percent year-to-year decline in sales revenue.
“We delivered significantly better results in first half of fiscal year 2021 due to improved margins, higher prices and lower operating costs,” states Alistair Field, the company’s group CEO and managing director. “Pleasingly, the cost-reduction program is on track to achieve annualized cost savings in excess of $70 million in fiscal-year 2021 compared to fiscal-year 2019.”
In presentation slides accompanying its first-half fiscal year 2021 results, Sims says, “Market prices improved throughout the period, particularly during November and December 2020.”
The company’s presentation points to improved ferrous and nonferrous metals prices Sims describes as having reached their lows in April 2020. On the nonferrous front, Sims expresses optimism that “since Nov. 1, 2020, recycled nonferrous [scrap] that meets quality standards can be freely imported into China without quotas.”
In its United Kingdom market, Sims went from losing money in the second half of 2019 to an income of $10.5 million in the second half of 2020. The company’s profits rose by about 24 percent in the Australia and New Zealand region, but its biggest turnaround was in North America.
The company’s North America Sims Metal Management operations went from earning a thin $100,000 in profits in the second half of 2019 to a far healthier $24.6 million in the second half of 2020.
The Sims stake in North America’s SA Recycling operations earned another $24.4 million in profits in the second half of 2020, with no profit figure at all attributed to SA Recycling (or broken out separately) in the second half of 2019.
Sims Ltd. also has reported progress in its efforts to handle auto shredder residue (ASR), writing of “substantial progress in strategic growth plans” concerning Sims Resource Renewal. Sims says a “commercial demonstration confirmed Sims ASR produces a high-quality syngas” and that the “next stage gate identifies best outputs from [the] syngas.”
The global Sims Lifecycle Services (e-scrap) operations, which earned $14.8 million in the second half of 2019, saw profits drop by 54 percent to $6.8 million in the second half of 2020.
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Source: Recycling Today
Sims reports increased profits despite lower sales figure
<![CDATA[Australia-based Sims Ltd., which has metal and electronic scrap recycling operations in that nation, North America and Europe, has reported a 480 percent increase in earnings before interest, taxes, depreciation and amortization (EBITDA) in the first half of its 2021 fiscal year, which covers the second half of the 2020 calendar year.The company’s increased profits compared with its first half of its 2020 fiscal year (the second half of 2019) occurred despite a nearly 10 percent decline in sales revenue. Sims Ltd. attributes “COVID-19 impacts” for volume levels in the second half of 2020 it describes as being “at 85 percent of average fiscal year 2019 monthly volumes.”In the July to December 2020 time frame, Sims Ltd. posted EBITDA of $177.1 million, rising 480 percent from the $30.5 million in profits in the second half of 2019. The profitability occurred despite a 9.5 percent year-to-year decline in sales revenue.“We delivered significantly better results in first half of fiscal year 2021 due to improved margins, higher prices and lower operating costs,” states Alistair Field, the company’s group CEO and managing director. “Pleasingly, the cost-reduction program is on track to achieve annualized cost savings in excess of $70 million in fiscal-year 2021…