Australia-based Sims Ltd., which has recycling operations in that nation as well as in the United States and United Kingdom, has issued a news release advising the investment community that the earnings guidance it issued just one month ago must be withdrawn.
In the March 20 press release, Sims says its Feb. 18 outlook statements anticipating “underlying EBIT (earnings before interest and taxes) of from $23.1 to $34.7 million for the first half of 2020 are no longer realistic. The first half of the 2020 calendar year is the second half of the Sims Group’s 2020 fiscal year.
Referring to mid-February, the company writes, “At the time, the company noted that risks to this outcome were COVID-19, aggressive competitor buy-side pricing and change to the gradual Turkish recovery. The company today announces that given the unprecedented worldwide response to slowing the spread of COVID-19, and the magnitude of the impact this will have on economic activity, it is prudent to withdraw its outlook” for the second half of its current fiscal year.
The company says some positives are still to be found in its global operations, writing:
- China has commenced progressive resumption of business activity across the country, with demand for nonferrous metals now evident.
- Ferrous scrap liquidity in North and Southeast Asia is limited, but there is demand in the Gulf Cooperation Council region of the Middle East, Turkey and Central and South America.
- Sims as a company “has sales across all divisions, including cloud infrastructure” to keep those sales activities moving.
“The safety of our employees, suppliers, customers and communities in which we operate is our first priority and we are following the guidelines and recommendations made by the various authorities, including health, hygiene and social distancing,” remarks Group CEO and Managing Director Alistair Field.
Adds Field, “We’ve entered this environment with a strong balance sheet. While our focus has always been on disciplined capital expenditure and cost management, we will be particularly cautious during this period. This will put us in a strong strategic position when the market normalizes.”