Sims (SGM) H1 2025 earnings summary

Executive summary

• Achieved a strong earnings turnaround in North America Metal (NAM) with significant margin expansion and increased unprocessed volumes, while ANZ remained resilient despite headwinds.

• Sims Lifecycle Services (SLS) delivered robust growth, with EBIT up 69.9% year-over-year and an 80% increase in repurposed units.

• Sale of UK Metal business completed, generating $398.9 million in proceeds and contributing to a 242% increase in operating cash flow.

• Group underlying EBIT rose 184% to $73.0 million, and underlying EBITDA increased 51% to $201.5 million compared to HY24.

• Interim dividend of 10.0 cents per share (100% franked) was declared.

Financial highlights

• Sales revenue grew 4% year-over-year to $3,645.5 million, driven by non-ferrous growth and acquisitions.

• Underlying EBIT reached $73.0 million (up from $25.7 million), and underlying EBITDA was $201.5 million (up from $133.1 million).

• Statutory NPAT was $30.8 million, down 68.6% due to significant items in the prior period.

• Operating cash flow surged to $347.8 million, up from $101.8 million, reflecting asset sales and working capital improvements.

• Free cash flow after capital expenditures was $264.3 million, a significant increase from $8.7 million.

Outlook and guidance

• Ferrous prices and intake volumes expected to remain dynamic, with global steel overcapacity and elevated Chinese exports persisting.

• Non-ferrous demand remains robust, supporting solid volumes and prices.

• SLS anticipates continued strong momentum in the hyperscaler data centre market and targets ~$30 million EBIT for FY25.

• Cost savings initiatives and lessened inflationary pressures are expected to support margins in the second half.

• No formal guidance, but management expects second half results at least in line with the first half, skewed to Q4.