Sims shares jump on positive start to fiscal year
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More news: Shares in Sims rose nearly 9% to $12.02 in early trading after the metals recycling firm reported improved first quarter performance at its North American business despite challenging market conditions continuing in Australia and New Zealand.
What they said: "In our view the positive start is reflective of both recovering volume momentum albeit at soft prices, and the cost reduction efforts by Sims during the 2H24," RBC Capital Markets analyst Owen Birrell said in a note.
"With the challenging macro environment expected to continue for some time, we are reticent to get too overly positive on the back of today's update, but will be watching the outlook carefully."
Sims ANZ business drag on Q1 recovery
The news: Metals recycling firm Sims has reported improved first quarter performance at its North American business but this was offset by challenging market conditions continuing in Australia and New Zealand.
The numbers: The company said the metal businesses are projected to deliver overall earnings of $55 million in Q1 FY25, with North America Metal set to deliver an improved $29 million in EBIT and 22% in trading margin.
By contrast, ANZ metal earnings are estimated at $13 million for the first quarter of FY25, below the run rate in the second half of FY24.
Sims’ 50% share of SA Recycling’s earnings is expected to deliver $24 million for the first quarter.
The context: Sims said the ANZ business continued to face challenging market conditions, impacted by increased Chinese exports into Asia and a slowdown in the domestic market.
Sims last month reported a full-year net loss of $57.8 million and slashed dividend amid the export market pressure. It also offloaded its UK recycling business and stake in another business for $435 million.
What they said: “It is encouraging to see the improved performance of our metal businesses despite the challenging market conditions, particularly as we refocused our portfolio,” Sims CEO Stephen Mikkelsen said.
The source: ASX announcement
