Sims Group Ltd., recorded third quarter profits of $42.8 million, a 99 percent jump from last year’s third quarter figure of $21.5 million. Additionally, the figures were a 143 percent jump from second quarter figures.
Sims, headquartered in Australia, has recycling locations throughout the world, including a large and growing presence in the North American market.
Profit after tax for the first three quarters stand at $77 million, up by 43 percent from $54.0 million in fiscal 2003.
Jeremy Sutcliffe, chief executive, noted, “across all operating regions, the group was able to take full advantage of record high international ferrous prices, particularly towards the end of the quarter. The March result was outstanding as the full benefit of the rapid increase in prices was enjoyed. While raw material input costs increased and ocean freights remained high, the Australian dollar traded slightly lower than our forecast. Strong volumes and a disciplined trading policy, contributed to the result.”
The company also noted that during the third quarter the company’s organic and acquisitive growth strategy remained on track. In addition to the acquisition of Bay Bridge (see related story), the company also expects to make further announcements in both its core metal recycling business and its growing Recycling Solutions Division.
Commenting on the outlook for the full year, Sutcliffe noted “the underlying drivers which fuelled the escalation in ferrous prices remain, with global steel production continuing to increase. Current ferrous prices are still significantly higher than those achieved in the first half of fiscal 2004. They are also higher than our anticipated average ferrous selling price for the whole year although they have, predictably, declined from their unprecedented early year highs.
“Chinese demand has softened (as a result of higher domestic scrap arisings, tighter Government control on investment in the steel sector, infrastructure projects and housing, and also a shortage of electricity) but further growth in Chinese steel consumption is expected as these restrictions are eased.” Sutcliffe also advised that during the fourth quarter, the company will, as a consequence of a review underway, be assessing the carrying value of its investment in Consolidated Extrusions, the copper and brass extrusion joint venture in which it holds a one third interest.
Sutcliffe concluded “disregarding any potential impact of this assessment, the company now expects that fiscal 2004 full year earnings will exceed $110 million, being more than 46 percent higher than fiscal 2003.”