Sims (SGM) H1 2026 earnings summary

Executive summary

• Sales revenue rose 3.7% year-over-year to $3,778.6 million, driven by strong SLS and non-ferrous performance, while statutory NPAT was a loss of $29.9 million due to significant items and unrealised hedge losses.

• Underlying NPAT increased 70.9% to $60.0 million and underlying EBIT surged 65.9% to $121.1 million, with SLS, NAM, and SA Recycling offsetting ferrous market headwinds.

• Interim dividend increased 40% to 14 cents per share, reflecting improved underlying performance.

• Strategic acquisitions, including Tri-Coastal Trading, and SLS expansion into Ireland enhanced market presence and operational flexibility.

• Statutory results were impacted by a $66 million loss allowance from the prior year UK Metal sale and a $41 million unrealised hedge loss.

Financial highlights

• Underlying EBITDA rose 24.0% to $249.8 million, while statutory EBITDA fell 26.2% to $143.8 million.

• Underlying EBIT margin improved to 3.2% from 2.0%; underlying EPS (diluted) increased 70.6% to 30.7 cents.

• Group net assets stood at $2.5 billion; ROIC improved by 1.9 percentage points to 6.2%.

• Operating cash flow was $155.2 million, with a 95% EBITDA conversion rate.

• Capital expenditure was $66.5 million, mainly for metal recovery and facility upgrades.

Outlook and guidance

• SLS is positioned to benefit from strong DDR4 chip demand and constrained supply, supporting secondary-market pricing.

• Non-ferrous markets expected to remain robust, supporting trading margins across all regions.

• US tariffs to continue supporting domestic ferrous and non-ferrous demand, while Chinese steel exports remain a headwind for global ferrous prices.

• Additional SLS guidance to be provided in March after further data is available.