Sims shares plunge after company flags Q1 earnings hit
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More news: Shares in Sims Ltd have slipped more than 12% to $13.54 in early trading on the ASX after the metals recycler said weak market conditions still hadn’t abated and flagged that a margin squeeze meant it would only break even in the September quarter.
Sims flags weak trading for September quarter
The news: Metals recycling firm Sims Ltd says it expects a squeeze in margins for the September quarter amid subdued demand for steel and weak scrap prices.
The numbers: The company expects to only break even in the September quarter due to the challenging market conditions. Sims last month reported a 70% slide in net profit to $181 million while sales dropped 13% to $8.1 billion.
The context: Sims had last month warned that steel demand remained subdued and the scrap price did not appear to be sufficient to stimulate robust scrap supply. On Monday, it said August accounts and September trends made it clear the weak market conditions still hadn’t abated. “Furthermore, the previously resilient US domestic market is showing signs of weakening,” the company added.
The source: ASX announcement
