Australian metal processor Sims achieved significantly improved results in the first half of its 2021 fiscal (ending December 31, 2020), on expanding margins and lower operating costs.
The global recycler’s ferrous inbound material increased as January’s commercial intake volumes were above those in 2019 and 2020. Looking ahead, the company is on target to reach over $70mn ($54.34mn) of annualized cost savings in 2021 compared to 2019.
The metal processor noted in a press release on Tuesday that though ferrous liquidity and irregular pricing may continue through June 2021, the market is expected to remain strong due to infrastructure incentives. Moreover, global auto production could regulate and support zorba pricing, while China’s resumption of ferrous scrap imports is expanding volumes that may strengthen supply and demand.
On Feb 12, the company acquired a major aluminum processor, which will boost non-ferrous retail volumes by 24pc for North America Metal. Sims also acquired an existing recycling facility in the rising Southwest Sydney region on Feb 3 and has supplied application submittal for its pilot resource renewal site in Rocklea, Queensland.
The recycler’s ferrous commercial sales volumes fell by 0.5pc in July-December 2020 to 4.3mn mt while non-ferrous commercial sales volumes dropped by 27pc compared to the first half of 2019. Global operations accounted for 9.8mn mt of annual sales of secondary metals.
The company’s sales declined by 9.5pc to $2.45bn in H1 FY2021 compared to $2.71bn in the same period in the previous fiscal due to reduced sales volumes, sales mix, and the sale of its European compliance scheme operations that was finalized in April 2020.
Sims’ underlying EBITDA tallied at $155mn in H1 FY2021, up 106.9pc against $74.9mn in H1 FY2020. The processor’s underlying EBIT increased by 343pc to $56.4mn from an EBIT loss of $23.2mn during the same comparative timeframe.
Increases were attributed to market prices that improved notably in November and December 2020. However commercial intake volumes stood at 85pc in July-December 2020 compared to the average full fiscal 2019 monthly volumes due to the effects of the COVID-19 pandemic. Although, this represents a 9pc increase compared to January-June 2020.
($1 = AUD$1.29)