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Sims MM swings back into profit with 2010 fiscal results

Sims Metal Management showed it had swung back into profit in the past year, almost doubling it against last year’s loss, when it published its financial results for 2010 today (27 August).

The world’s largest metal recycler made a net profit of A$127m (£72.5m) against the previous year’s A$150m (£85.6m) loss. The group cited its non-ferrous metal business as a reason for this turnaround, while ferrous margins and scrap flows “continued to be disappointing”.

Its total scrap intake was 13.3 million tonnes and scrap shipments were 12.9 million tonnes. This showed a 6% increase in scrap intake and a decrease of 2% in scrap shipments.

Group chief executive officer Daniel Dienst said: “We noted improvement in many of our markets in fiscal 2010, especially when considered in the context of the turmoil encountered in fiscal 2009. Our non-ferrous metals business achieved healthy margins and strong year-on-year growth, confirmation of a core competency as we buy locally and market globally these metals. Sims Recycling Solutions (SRS), our electronic recycling business, was a notable strong contributor.”

The group plans to invest in its non-ferrous metal recovery business and in more non-ferrous recovery technology in the UK. It believes this will increase returns on investments and strengthen its position in that market. It will also strengthen SRS “organically” and through acquisition. SRS recently bought waste electrical and electronic equipment recycler Wincanton Recycling.

But the company’s outlook for the future of the ferrous market was downcast, explaining that scrap flows remain weak in North America and Europe because of economic conditions and hot weather during the summer. Demand for ferrous is “lukewarm” but prices may rise further because of the limited supply.

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