Global scrap metal dealer Sims Metal Management has written down the value of its North American operation by A$614m (£421m).
Shares in the company, which has has 42 recycling sites in the UK, plunged by 12% in early trading in Sydney before closing down 6.9%, a fall of A$1.06.
Sims said the impairment charge relates to goodwill, or intangible assets, on a number of acquisitions and joint ventures made prior to 2008.
The company said the acquisitions were made in North America “prior to the severe global economic downturn and US recession that adversely impacted the traditional scrap metal recycling industry”.
“The writedown of goodwill, a non-cash item, will not impact the company’s dividend policy, growth strategy across all regions and businesses, share buy-back plan, or its compliance with credit agreements.” its statement said.
The company’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA), which excludes impairment charges, is expected to be around A$141m, up from underlying EBITDA of A$138m in the last corresponding period.
“First half results were impacted by continued difficult operating conditions for the traditional metals business.”
“Results in the first half for Australasia and Europe (excluding the UK traditional metals business) remained solid,” Sims said.
The Australian firm will announce its half year results to 31 December on 17 February.