The Australian-owned multinational metals recycler said that its UK division has been an important component of these results, including the recycling of over 360,000 fridges in the 12-month period up to June 30, 2004. This was almost 130% up on last year's fridge processing figures following the commissioning of Sims UK's second fridge recycling plant.
The Group, which earns 60% of its revenue from businesses outside Australia – in the UK, North America, New Zealand and Asia – had a record intake of material globally. Overall, intake was up 5% in tonnage terms – with shredded production at a record 2.2 million tonnes (up 4%) and non-ferrous intake up 11% to over 300,000 tonnes.
Surging global steel production and higher steel prices triggered largely by the Chinese economy was a catalyst for the company's earnings. The bulk of the $52 million increase in earnings came through the ferrous and shredding side of the business.
The Group's recycling arm, Sims Recycling Solutions, made “considerable” progress during the year, not only in fridge recycling but also in electronics and tyres. “The Group made strides in tyre recycling through the acquisition of Tyrecycle, Australia's large collector and processor of used vehicle tyres and also through the commissioning of the Group's UK plant,” a statement from the Group said.
The major global acquisition of the year saw Sims taking over the Virginia-based shredding and exports company Bay Bridge Enterprises, while Sims also leased the Chaparral mega-shredder to strengthen its position on the US East Coast.
The largest capital project for the Group has been in the UK, where Sims UK has been working on the Group's largest capital project upgrading its Newport facility with the “world's largest mega shredder” and rail links, projects that the Group said are “on track for completion in the next few weeks”.
Confident
Looking ahead, group chief executive Jeremy Sutcliffe said Sims remains quietly confident that steel production and demand in China will remain firm, “despite governmental and other constraints such as electricity shortages”.
He said: “We see continued demand in most major markets, including the USA where high steel prices continue to lead to high steel mill utilisation rates and strong raw material requirements.
“Having said this, irregular buying patterns are likely to continue as consumers attempt to second guess market trends – this can only add to price volatility, although this should not reach fiscal (year) 2004 proportions,” he added.
If current prices were maintained, Sims would have “another exceptionally strong year” next year, Mr Sutcliffe said, but warned that it was “far too early to provide an accurate forecast”, especially with the volatility of prices seen in the last 12 months.
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