Sims shares drop amid soft ANZ earnings
Make us a preferred source
Make us a preferred source on Google
More news: Shares in Sims were down in early afternoon trade after the metal recycling announced a 24% EBIT decline at its ANZ metals business and reported lower-than-expected EBIT for its North America (NA) metals business.
At 1:10pm AEST, shares in Sims had fallen 4.7% to $14.58.
RBC Capital Markets analyst Owen Birrell highlighted in a research note that the ANZ metals business faced a 24% decline in EBIT year on year and came in 7% lower than the financial services firm had expected.
He also noted that NA metals’ EBIT missed market consensus estimates by about $20 million. However, Birrell said rebounding from a $13 million loss in the previous comparable period was “a solid effort”.
RBC Capital has positive sentiment towards the stock and Birrell anticipates that “sustained strength in non-ferrous demand” will deliver strong trading margin contributions across NA metals, ANZ metals and SA recycling joint venture.
Sims more than doubles dividend on modest profit lift
The news: Metal recycling firm Sims' net profit after tax marginally lifted to $2.4 million in financial year 2025 compared to the $1.8 million posted in the previous year amid headwinds such as global oversupply of finished and semi-finished steel.
The numbers: A final dividend of 13 cents per share was declared, bringing the total fully franked dividend to 23 cents. This is 130% higher than last year's total payout of 10 cents per share, but just below analyst expectations of 24 cents per share, according to Visible Alpha.
Statutory EBITDA came in at $323.7 million, down 10.5% compared to the $361.7 million reported in the previous year. Analysts expected EBITDA to come in at $450.1 million.
Sales revenue was $7.49 billion in FY25, up 4.1% year on year.
The context: During the period, Sims completed the sale of the UK Metal business. Sales revenue in Australia and New Zealand was lower due to lower demand in the domestic market and increased Chinese exports into Asia.
The North America Metal business saw sales revenue tick up while Sims Lifecycle Services "outperformed", buoyed by growing hyperscaler activity and US data centre expansion.
Looking to FY26, the company expects non-ferrous demand to remain strong and tariffs to boost US ferrous demand. Outside the US however, record-high Chinese steel exports are expected to "keep ferrous prices muted".
What they said: Sims group CEO and managing director Stephen Mikkelsen said "ferrous market conditions were particularly difficult, with global oversupply of finished and semi-finished steel, soft macroeconomic conditions, trade policy uncertainty, and tight scrap supply placing pressure on the sector".
However, he flagged that there have been favourable structural drivers including "strong non-ferrous markets, good US steel spreads, and growing [electric arc furnace] demand".
