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
Read more from Ethan BernardLatest in Steel Products
September energy market update
In this Premium analysis we examine North American oil and natural gas prices, drill rig activity, and crude oil stock levels through September. Trends in energy prices and rig counts serve as leading indicators for oil country tubular goods (OCTG) and line pipe demand.
Market says cutting interest rates will spur stalled domestic plate demand
Market sources say demand for domestic plate refuses to budge despite stagnating prices.
U.S. Steel to halt slab conversion at Granite City Works
U.S. Steel said it plans to reduce slab consumption at its Granite City Works near St. Louis, a company spokesperson said on Monday. The Pittsburgh-based steelmaker will shift the production and processing of steel slabs to its Mon Valley Works near Pittsburgh and its Gary Works near Chicago. Citing a United Steelworkers (USW) union memo, […]
SMU Week in Review: September 1-5
Here are highlights of what’s happened this past week and a few upcoming things to keep an eye on.
HR Futures: Market finds footing on supply-side mechanics
As Labor Day marks the transition into fall, the steel market enters September with a similar sense of change. Supply-side fundamentals are beginning to show signs of restraint: imports are limited, outages loom, and production is capped, setting the stage for a market that feels steady on the surface but still unsettled underneath.