Sims Metal Management experienced a 15% drop in scrap intake in Europe over the last quarter of 2010 as a result of the severe weather.
The metal recycling giant, experienced an overall 4% drop in scrap intake for the second half of 2010, but continues to generate “strong” earnings, according to its half year results.
Results revealed scrap intake dropped 4% on the corresponding period in 2009 to 682,000 tonnes. In the last three months of the year scrap intake dropped by 15% to 313,000 tonnes. Despite this, sales revenue for Europe was up 26% year on year but Sims chief executive Daniel Dienst put this down to the success of its waste electronic equipment recycling division based in the UK, Sims Recycling Solutions.
He said: “Our European business is generating strong earning despite the traditional metals business encountering weak intake and tight margins for ferrous scrap. The performance of SRS was the primary driver of our successful performance in Europe.
“We recently closed the acquisition of another business for SRS in continental Europe that fits well strategically with our successful business in the region. E-recycling is a core focus and we continue to target both organic and external growth for SRS.”
Dienst added that he felt currently strong ferrous prices are consistent with recovery in global steel production coupled with the tight supply of material. He said the recent Egyptian revolution has “led to tentative behaviour in the Mediterranean deep sea ferrous export markets”.
Overall, Sims experienced a 9% increase in its earnings before tax (EBITDA) to £92.7m, while scrap intake and shipments were 6.6m tonnes and 6.5m tonnes respectively.