Sims shares tumble after swing to first-half loss
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More news: Sims was one of the worst performers on the ASX after the metals recycling group swung to a first-half net loss.
Sims shares were down 4.5% to $20.32 at midday AEDT, having climbed 44.4% over the last 12 months.
RBC Capital Markets analyst Owen Birrell said despite the half-year net loss, Sims beat consensus estimates for underlying earnings and interim dividend.
He called the result a "solid print" but noted "finding value is challenging without formal guidance".
Sims swings to first-half loss after $60m Unimetals hit
The news: Metals recycling firm Sims swung to a statutory net loss of $29.9 million in the first half of the fiscal year, after earnings were impacted by unrealised losses on derivative contracts and a $60 million expected credit loss relating to the liquidation of UK-based Unimetals late last year.
The numbers: The result compared to a net profit of $30.8 million in the prior corresponding period and missed average forecasts of $50.7 million, according to Visible Alpha. On an underlying basis, net profit after tax jumped 70.9% to $60 million.
Revenue was up 3.7% to $3.78 billion, short of estimates of $3.87 billion. The company declared an interim dividend of 14 cents per share, up from 10 cents a year prior and above consensus estimates of 13 cents.
The context: Sims chief executive Stephen Mikkelsen called it a "good solid result in a difficult market". He noted the "extraordinary demand" for AI chips has driven demand in used DDR4 memory chips, with the company well positioned to benefit in DDR4 prices and a rise in hardware prices more broadly.
Mikkelsen said conditions for ferrous metals in Australia and New Zealand "remained difficult" due to elevated Chinese steel exports, though a strong non-ferrous market helped offset the impact.
The source: ASX
