Sims (SGM) H1 2026 earnings summary

Executive summary

• Half-year FY2026 results showed strong SLS and North American Metals (NAM) and SA Recycling (SAR) performance, offsetting subdued ANZ metals, with sales revenue up 3.7% to $3,778.6 million and underlying NPAT up 70.9% to $60.0 million, despite a statutory NPAT loss of $29.9 million.

• SLS revenue surged nearly 70% year-over-year, driven by DDR4 memory price increases and higher repurposed unit volumes, with underlying EBIT up 247.5% to $49.0 million.

• NAM and SAR benefited from strong non-ferrous markets and domestic sales, while ANZ faced ongoing challenges from weak global ferrous prices and a strong Australian dollar.

• Strategic achievements included key supply agreements, operational efficiency gains, the Tri-Coastal acquisition, and SLS's Ireland expansion, enhancing market presence and reducing costs.

• Declared a fully franked ordinary dividend of AUD 0.14 per share for the six months ending 31 December 2025, payable 18 March 2026.

Financial highlights

• Metal sales revenue remained flat despite a 2% decline in sales volumes, as higher non-ferrous prices offset lower ferrous prices.

• SLS EBIT margin increased by 7.7 percentage points, with repurposed units up 18% year-over-year.

• Non-ferrous trading accounted for over 40% of group revenue, up from 35% in the prior period.

• Statutory EBITDA fell 26.2% to $143.8 million, while underlying EBITDA rose 24% to $249.8 million year-over-year.

• Interim dividend of AUD 0.14 per share declared, fully franked, with no unfranked or conduit foreign income component.

Outlook and guidance

• Strong outlook for DDR4 secondary market pricing, with supply-demand imbalance expected to persist beyond 2027.

• Non-ferrous markets anticipated to remain robust, supported by global electrification and renewable energy trends.

• Tariffs to continue supporting North American ferrous margins; EAF capacity growth in the US and New Zealand to drive future demand.

• ANZ ferrous recovery dependent on a reduction in Chinese steel exports, which appears unlikely in the near term.

• Additional SLS guidance to be provided at the March investor presentation.