Sims first-half profit tumbles, lifts dividend

The news: Metals recycling firm Sims Ltd has posted a sharply lower profit, with its year ago number inflated by one-off items, but raised its dividend on stronger underlying earnings.

The numbers: The company reported net profit of $30.8 million, down 69% from the year ago number, which included one-off gains on asset sales. Underlying profit quadrupled to $35 million, from $7 million a year ago, while revenue was up 4% to $3.65 billion. It will pay an interim dividend of 10 cents a share, up from no dividend a year ago.

The context: CEO Stephen Mikkelsen said the company delivered a strong performance against a challenging market, helping it lift earnings, significantly reduce debt and return cash to shareholders. He said weak economic conditions and market pressure from higher Chinese steel exports lowered pricing and scrap demand in the ANZ business. North American volumes were also lower as the company focused on higher margin unprocessed material. However, earnings rose due to improved operating performance in North America and Lifecycle Services businesses.