Sims Metal Management Ltd.’s North American recycling operations lost more than $600 million in its fiscal first half, primarily because of a one-time charge and tough recycling business for the company.
New York-based Sims, subsidiary of the Sydney-based parent company, reported a loss for its first half of AUD $577.8 million (($618 million U.S.) on earnings before interest and tax (EBIT). The company had a non-cash goodwill impairment charge, which made up most of the EBIT expense of AUD $584.7 million ($625.5 million U.S.), the metals and electronics recycling company said in a news release.
Revenue rose 18 percent for North America from the year-ago period to AUD $3 billion ($3.21 billion U.S.).
North American scrap intake increased by 8 percent and shipments increased by 11 percent.
“In North America we continued to encounter weak intake and margin pressure especially toward the end of our first half,” said Sims Group CEO Daniel Dienst. “In October and November, ferrous scrap prices plummeted as deep sea ferrous markets once again became illiquid as economic concerns for Europe and for slowing growth in China became pervasive.”
Sims said it completed four acquisitions for North America Metals in its first half, in North Carolina, New Jersey and Rhode Island, as well as a tuck-in for its aerospace business. Sims also implemented a management realignment in North America to streamline decision-making and improve efficiency.