shredded steel scrap
Despite “softer economic conditions” at the moment, Sims Ltd. says, “We remain very confident in the medium and long-term fundamentals of the business.”
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Sims doubles profits in fiscal year 2022

Global recycling firm grows earnings per share by more than 100 percent, says new fiscal year has started with “soft economic conditions.”

August 17, 2022

Australia-based Sims Ltd. says in its 2022 fiscal year, which ended June 30, the company saw its sales revenue rise by more than 56 percent compared with the previous year while its underlying earnings per share (EPS) rose by 104.5 percent.

“Fiscal year 2022 was a very strong year,” CEO and Managing Director Alistair Field says. “I am proud that we delivered the strongest underlying EBIT [earnings before interest and taxes] result on record and significant trading margin and volume increases and significant trading margin and volume increases.”

He continues, “We made significant progress on our business strategy: successfully completed several strategic acquisitions, continued to deploy enhancement technologies in ferrous and nonferrous and opened new feeder yards in the metal business. In Sims Lifecycle Services (SLS), we launched new service offerings and invested in engineering and technology to continue driving innovation and build capacity to scale up operations quickly when the supply chain challenges ease.”

In a news release announcing its earnings, Sims executives point to what they call “improved safety metrics” and “strong progress” toward sustainability goals in the recently completed fiscal year.

On the operations side, the company points to its acquisitions of Pennsylvania-based Alumisource and Maryland-based Atlantic Recycling Group as new volume contributors going forward. In Australia, Sims is undertaking a deep-water port facility project in Brisbane it says will include “best-in-class design for shredder processing.”

In the U.S., Sims also points to its partnership with California-based SA Recycling as contributing to “record EBIT growth with significant trading margin expansion and sales volume growth.” Referring to shredded metal markets, the company adds, “Margins were further enhanced by higher zorba selling prices.” It also points to SA Recycling’s acquisition activity, saying it has “continued to create value through successful M&A integration.”

In its SLS business unit, the company says a recent global market share study showed SLS is now at 3.2 percent market share, more than doubling from its 1.5 percent status in 2019.

Looking at fiscal year 2023, now underway, Sims Ltd. says in its presentation, “Softer economic conditions have impacted our markets in the short term.” The company adds, “We remain very confident in the medium and long-term fundamentals of the business.”

In the ferrous market, Sims writes, “Ferrous prices peaked at around US$700 per metric ton in March 2022, but have subsequently fallen to trade between US$320 to US$400 per metric ton at the start of fiscal year 2023.”

Regarding the next 12 months, the company's executives conclude, “Fiscal year 2023 results will depend on how quickly and to what magnitude, global markets recover from the interest rate hike-induced slowdown.”