Global metal recycling giant Sims Metal Management has revealed it suffered a 75% loss in net profit in the first quarter of 2011 compared to corresponding 2010 Q1 figures.
Data showed the firm’s net profit after tax was just A$8.2m (£5m) compared to 2010’s year on year figure of A$32.8m (£20.1m). Sales revenue of A$1.88bn (£1.15bn) showed an increase of 4% on the 2010 figures but EBITDA was also down on the corresponding period by 44%.
According to group chief executive Daniel Dienst, decreases in scrap flows and constrained margins, particularly in North America have led to the losses. Sims bought 3.4m tonnes of scrap and shipped 2.9m tonnes in Q1 for 2011, whereas in Q1 2010 it purchased 3.6m tonnes and shipped 3.4m tonnes. This equates to a decrease in scrap intakes and shipments of 6% and 22% respectively compared to the previous three months.
Dienst said: “We continue to confront the stark realities of a stagnant and tentative US economy, which will continue to exhibit sluggish scrap flow generation until such time as more sustained and meaningful GDP and industrial production growth takes root.”
For the European part of the business, sales revenue was up 28% on the previous three month period to A$356m (£218m). Dienst praised UK-based Sims Recycling Solutions (SRS), Sims’ waste electrical and electronic equipment (WEEE) recycling arm, as it “once again delivered strong results in the first fiscal quarter. SRS earnings increased relative to the prior corresponding period, but did not achieve the level of profit of our strong fourth fiscal quarter.
“Further, we are excited about the future prospects and integration of our recently completed acquisition of Wincanton’s e-recycling assets in the UK.”
Sims bought the WEEE division of Wincanton for £17.5m in August.