Sims (SGM) H1 2026 earnings summary

Executive summary

• Underlying NPAT for HY26 rose 70.9% to $60.0 million year-over-year, with sales revenue up 3.7% to $3,778.6 million and underlying EBIT up 65.9% to $121.1 million, driven by strong SLS and North American Metals (NAM) performance, while statutory NPAT swung to a $29.9 million loss due to significant one-off items.

• SLS revenue surged nearly 70% year-over-year, with EBIT up 247.5%, fueled by exponential DDR4 memory price increases, higher repurposed unit volumes, and hyperscaler demand.

• NAM and SAR benefited from strong non-ferrous markets and operational improvements, offsetting subdued conditions in ANZ metals, which faced weak ferrous margins.

• Strategic achievements included the Tri-Coastal acquisition, SAR bolt-on acquisitions, and SLS expansion into Ireland, enhancing market presence and digital transformation.

• Interim dividend increased to AUD 0.14 per share, fully franked at a 30% tax rate, payable 18 March 2026.

Financial highlights

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

• Statutory EBIT dropped 77.3% to $15.1 million, but underlying EBIT increased 65.9% to $121.1 million.

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

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

• Net cash inflow from operating activities was $155.2 million, down from $347.8 million, reflecting prior period asset sales.

Outlook and guidance

• SLS is positioned to benefit from strong DDR4 chip demand and constrained supply, supporting secondary-market pricing, with structural supply-demand imbalance expected to persist beyond 2027.

• Non-ferrous markets anticipated to remain robust, supported by global electrification and renewable energy trends, benefiting trading margins across all regions.

• Tariffs to continue supporting North American ferrous and non-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.