Australian-based Sims Metal recorded a strong performance across all major regions for its fiscal 2021 ended Jun 30, following setbacks experienced in 2020.
Considerable progress was made in the company’s strategic programs leading into fiscal 2022, which is off to a solid start. The company sees positive industry drivers in the medium to long-term, indicating a strong position for 2022 and beyond.
Good performance trended during H2 of 2021, which advanced the recycler’s July actual results, although the COVID-19 pandemic continues to pose supply, demand, and supply chain risks. Key export markets such as Southeast Asia and Turkey have shown signs of growth this year for ferrous and non-ferrous metals that recovered well from lowered market conditions in Apr 2020.
Global volumes have restored to 2019 levels, though not consistent across all regions and with the greatest recovery in North America. The recycler foresees impacts from stimulus spending will continue to boost recycled metal demand in infrastructure spending and retail consumption.
The company launched its 2025 and beyond sustainability targets earlier in the year with progress on target despite COVID-19 interruptions. The company’s ferrous volumes were 6.3mn mt in 2020 with plans to reach 9.6mn mt by 2025.
Sims noted its commercial intake levels rose by 18.5pc in 2021 compared to 2020, though stood at 87pc of 2019’s intake volumes. This was due to the closure of 14 non-profitable sites since 2019 and ongoing restrictions on inbound supply from Covid-19.
Sims Limited, the company’s global unit generated profits before tax of AUD386.6mn ($279.6mn) in 2021, an increase of AUD444.5mn compared to underlying EBIT of negative AUD57.9mn in 2020. The company’s underlying EBIT for 2021 also marks its strongest results in 13 years.
The metal processor’s UK operations recorded more than a two-fold increase in its 2021 profits before tax to AUD45.7mn compared to 2020. The company’s sharp increase in earnings was attributed to elevated sales volumes, effective margin management, and a reduction to predominantly fixed costs.
SA Recycling, the 50-50 joint venture (JV) between Sims and Adams Steel, reported an exceptional year with strong margin management that generated high growth in per ton margins. The JV gradually expanded by acquiring assets over the past five years. About 600,000mt of yearly capacity has been gained in 2021 compared to 2017 due to these 10 purchases.
Sims started in Australia in 1917 and recycles ferrous and non-ferrous metals holding almost 4,000 employees in over 200 sites in 15 countries. Sims operates over 40 metals recycling sites in the UK.
($1 = AUD1.38)