Sims Group Posts Reports Healthy Numbers

Australia's Sims Group Ltd. posted a record net profit of A$105.2 million for the first half of its 2005 fiscal year, more than tripling the comparable year-ago profit of A$34.2 million.

The company also reported a significant 53 percent increase in revenue for the first half of the fiscal year to A$1.31 billion, it said.

"This outstanding record result is consistent with the guidance which we provided at the company's annual general meeting in November," chief executive Jeremy Sutcliffe said.

The largest contribution to the profit increase came from Sims' shredding and ferrous processing operations, which accounted for A$102 million of its A$120 million improvement in operating earnings, the company said.

"Sustained economic growth, particularly in China, fueled record global crude steel production and drove ferrous prices up to near record highs," Sutcliffe said.

The medium-term outlook for Sims remains encouraging, he added. "When we look at the global steel industry we see strong demand continuing, despite a slowing in investment in the steel sector in some regions."

The company believes China's current appetite for steel-making raw materials is sustainable over the medium term, Sutcliffe noted.

A further update on the full-year forecast will be issued when Sims announces its third-quarter results, but Sutcliffe said further appreciation in metal prices coupled with a sustained strengthening of the U.S. dollar "would have a positive impact on the full-year result."