Steel Products

Sims' FY'23 N. America Earnings Dip, But Touts Recent US Buys

Written by Ethan Bernard

August 18, 2023

Global metals and electronics recycler Sims Ltd. reported lower earnings in its North America Metal division for its fiscal-year 2023 that ended June 30 due to “falling sales prices and strong domestic competition.”

The Australia-based company’s North America Metal division posted underlying ebit of AUS$55.5 million (USD$35.5 million) in FY’23, down 81% from the previous fiscal year on sales revenues that fell 12% to A$3.92 billion (US$2.51 billion.).

In an earnings presentation on Aug. 15, Sims said the drop in sales was because of a “decrease in average sales prices, combined with flat sales volumes.”

The company touted its acquisitions of Baltimore Scrap Corp. (BSC) and Philadelphia-based Northeast Metal Traders as key to the North America Metal division’s growth strategy.

Sims said the $177-million BSC buy, expected to close in October, “improves Sims’ exposure into growing US domestic steel mill demand, while retaining export optionality via coastal deep water port access.” BSC has 17 locations on the US East Coast and will provide the company port access in Baltimore and Chesapeake, Va.

The buy of copper recycler Northeast Metal Traders, completed in April, is aligned with the company’s “strategy to grow nonferrous volumes in North America, with a focus on value-added processing.”

Looking forward in the short term, Sims sees global steel demand remaining “subdued” entering the first half of of its FY’24. However, the company said, “Demand for ferrous scrap in the USA spurred on by infrastructure spending and EAF (electric-arc furnace) steelmaking production is expected to remain robust.”

The company said it remains confident in medium- and long-term fundamentals.

“The global decarbonization of steelmaking, growth of EAFs and electricity generation industries will drive the demand for recycled metal,” Sims said.

Metal recycler Sims Metal is a business division of Sims Ltd.

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.

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