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October 3, 2018

Sims Metal Management reports profitable fiscal year

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Australia-based Sims Metal Management has reported sales revenue that grew by nearly 27 percent and underlying net profit after tax (NPAT) that rose by 60 percent in its fiscal 2018 compared with the prior year. The company’s 2018 fiscal year ended June 30, 2018.

The metal recyler’s underlying NPAT of AU$192 million ($140.9 million) resulted in earnings per share of 93.2 Australian cents (68.4 cents), up from 59.9 Australian cents (43.4 cents) the prior fiscal year.

Sims Metal Management’s sales revenue of AU$6.45 billion ($4.73 billion) in its 2018 fiscal year was 27 percent higher compared with the 2017 figure. The company credits increased volumes and higher average sales prices for the boost.

Sims Metal Management says its underlying earnings before interest and taxes (EBIT) improved in its North America Metals, Australia and New Zealand Metals and Global E-Recycling business units. The company points to higher income from its investments in United States-based SA Recycling and in Australia-based renewable energy unit, LMS Energy, as positive factors influencing earnings.

The positive results were “partially offset by lower underlying EBIT from the Europe Metals segment,” the company says. In Europe, “Despite higher sales volumes, in part due to the acquisition of Morley Waste Traders, competitive pressure for intake volume was a key factor leading to the profit decline,” the company says.

Sims Metal Management notes the possibility of further escalations in global trade wars potentially having an impact on commodity prices and volumes. “This uncertainty is clearly a caveat that needs to be considered in the outlook for fiscal year 2019,” the company states.

BlueScope considers expansion of Ohio steel mill

Australia-based BlueScope Steel Ltd. says it is considering expanding its North Star Steel mill in Delta, Ohio, thanks to what it labels a more promising outlook for the North American steel sector. The steel mill is an electric arc furnace (EAF) operation with an annual capacity of 2.1 million tons per year of hot-rolled coil steel.

In an appendix to its most recent financial report, BlueScope says, “A comprehensive study has been initiated to evaluate adding between 600,000 to 900,000 metric tons (661,000 to 992,000 short tons) per annum of steelmaking capacity [in Ohio], through the addition of a third electric arc furnace and a second caster.”

The steelmaker has given the project an initial estimated price tag of from $500 million to $700 million and adds, “The project is expected to take two or three years to develop if we proceed.” BlueScope says it expects to provide an update on the project assessment in about one year.

In BlueScope’s 2018 fiscal year, which ended June 30, the company says its North American mill generated 13 percent more sales revenue compared with the previous fiscal year and that the mill’s “underlaying EBITDA (earnings before interest, tax, depreciation and amortization)” increased by 7.5 percent compared with the year before.

The steelmaker says it sells approximately 90 percent of its Ohio mill output in the Midwest U.S., with its end customers consisting of “broadly 50 percent automotive, 35 percent construction, 5 five percent agricultural and 10 percent manufacturing/industrial applications.”

BlueScope also comments that the mill has “high capacity utilization rates” and that “uncertainty around imports associated with Section 232 as well as improving world prices [have] helped support higher domestic [steel] prices” in the U.S.

In terms of its scrap feedstock, Waterloo, Indiana-based MetalX has been investing in a large auto shredder yard in Delta, Ohio, across the road from the BlueScope mill.