Sims’ late 2024 earnings decline from one year earlier

Australia-based Sims Ltd., which operates metals and electronics recycling facilities predominantly in that country and North America, has reported statutory earnings before interest, taxes, depreciation and amortization (EBITDA) of about $124 million in the second half of 2024. The final six months of 2024 represent the first half of the Sims fiscal year 2025.

The $124 million figure represents a nearly 35 percent drop in Sims’ EBITDA from one year earlier. The recycling firm says its revenue in the second half of 2024 topped $2.3 billion, which is up by 4 percent compared with the $2.22 billion in sales in the final six months of 2023.

Sims Group CEO and Managing Director Stephen Mikkelsen comments, “We delivered a strong performance against a challenging market, which many are citing as one of the most difficult in recent times.”

In addition to maintaining profitability, the CEO says during the time frame Sims “significantly reduced net debt” while engaging in what Mikkelsen calls “strategic initiatives” in its North American metals business he says “drove a significant uplift in the Sims Metal trading margins, despite lower ferrous prices and broader market headwinds, demonstrating that our strategy is working.”

Adds Mikkelsen, “We continued to challenge ourselves to stay ahead of structural market shifts and are extremely well positioned to capitalize on increasing regionalization and the growing need for supply chain reliability, drawing on our strong domestic network capability.”

Looking forward, the executive comments, “As demand accelerates for recycled metals and repurposed technology infrastructure, our focus on margin and cash generation will ensure a strong balance sheet, enabling us to navigate market cycles, reward investors and seize new growth opportunities.”

The company says EBIT generated by its SA Recycling partnership in the United States fell by just 20 percent (compared with companywide 35 percent) in late 2024 compared with one year earlier.

The SA Recycling “trading margin increased by 2.7 percent driven by a favorable product mix toward zorba products and the impact of acquisitions,” says Sims. “However, these acquisitions, along with inflationary pressures, also added to the cost base,” adds the firm.

Sims says its Australia and New Zealand metals recycling operations likewise experienced about a 20 percent drop in EBIT in the second half of 2024 compared with the prior year.

While generating smaller revenue and earnings amounts, the company says its Sims Lifecycle Services (IT asset disposition and electronics recycling) division saw EBIT in late 2024 rise by nearly 70 percent compared with one year earlier.

Sims says the increase was driven by “strong market conditions and sustained momentum in major [cloud service] activity, supported by increasing demand for data centers to support artificial intelligence advancements.”

In the outlook section of presentation slides prepared for investors, Sims says it expects ferrous prices and intake volumes to “remain dynamic to regional market influences.” The company adds, “Global steel overcapacity and China’s elevated exports are expected to continue.”

Sims also describes nonferrous recycled metal demand as having “a robust foundation,” adding, “This is likely to be reflected in continued solid volumes and prices.”