Sims praises UK business as group returns to profit

The company announced revenue of $7.5 billion (£4.8 billion) and a net profit after tax of $126.7 million (£82 million), compared to net loss after tax of $150 million (£97m) for the year ending June 2009.

The firm, which operates around 230 facilities globally, said there had been improvement in many markets compared to the “turmoil” in 2009 which saw metal prices plummet. It said that its non-ferrous business had achieved particularly healthy margins and singled out its electronics recycling arm, Sims Recycling Solutions (SRS) – which runs a WEEE recycling facility in Newport – for praise.

However, Sims said that ferrous margins and scrap flows “continued to be disappointing” when compared to expectations – particularly in North America – and that it had faced challenges during the year as the Western economies navigated from crisis to recession and recovery.

Group chief executive, Daniel W Dienst, said: “Despite the macroeconomic headwinds of fiscal 2010, Sims Metal Management finished the year operationally and financially stronger. We executed a capital raising transaction that provides us with a strong foundation to continue investing in technology while simultaneously pursuing external growth opportunities.”

During the year, the company's total scrap intake and shipments were 13.3 million tonnes and 12.9 million tonnes respectively. Scrap intake increased 6% and scrap shipments decreased 2% on the prior corresponding period.

UK

Looking at its European division in particular, the company said that sales revenue was up 7% on the prior corresponding period to $1.2 billion (£0.8 billion). Scrap intake in the region increased by 4% to 1.4 million tonnes in fiscal 2010, on a year-on-year basis.

Here, Sims praised its UK operations and pointed to the recent acquisition of the electronic recycling arm of Wincanton (see letsrecycle.com story).

Mr Dienst said: “Our European division also performed extremely well in fiscal 2010 led by a strong contribution from SRS, and solid performance by our U.K. metal recycling business despite macroeconomic headwinds.

The company said it also planned in 2011 to construct advanced technology for recovering non-ferrous metals in the UK from its “shredding downstream systems” in a similar manner to three systems recently installed in North America.

Mr Dienst said: “In fiscal 2011 we intend to invest in non-ferrous recovery technology in our UK metals business in order to increase returns on invested capital and strengthen our position in that market, and to expand our SRS platform both organically and through acquisition.”