Sims (SGM) H1 2026 earnings summary

Executive summary

• Half year FY2026 results showed strong SLS growth, resilient non-ferrous markets, and disciplined cost control, 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.

• Strategic achievements included new supply agreements, operational efficiency gains, expansion into Ireland for SLS, and the acquisition of Tri Coastal Trading in Houston for US$66.5 million post-period end.

• Safety performance remained at historical lows, and climate commitments advanced with improved data integration and active risk management frameworks.

• Declared a fully franked ordinary dividend of AUD 0.14 per share for the six months ending 31 December 2025, up 40% from the prior period, payable 18 March 2026.

• Underlying EBIT rose 65.9% to $121.1 million, while statutory EBIT dropped 77.3% to $15.1 million due to significant items and non-qualifying hedges.

Financial highlights

• SLS revenue rose 69.9% year-over-year to $327.4 million, with repurposed units up 18% and strong EBIT margin expansion.

• Non-ferrous trading accounted for over 40% of group revenue, with copper and aluminium prices up 13.5% and 9.8% year-over-year, respectively.

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

• Group cost base remained relatively flat, with a 4% increase over the comparative half, despite inflation and higher volumes.

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

Outlook and guidance

• Strong outlook for DDR4 chip pricing and SLS performance, with structural supply-demand imbalance expected to persist.

• Non-ferrous markets anticipated to remain robust, supported by global electrification trends and tariffs supporting US ferrous and non-ferrous demand.

• Chinese steel exports remain a headwind, likely keeping ferrous prices muted outside the US.

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