Sims (SGM) H2 2025 earnings summary

Executive summary

• Underlying EBIT surged to $174.9 million, up nearly 200% year-over-year, and underlying EBITDA rose to $430 million, up nearly 50%, driven by margin improvement, SLS growth, and cost reductions despite lower sales volumes and challenging market conditions.

• Sales revenue increased 4.1% year-over-year to $7,494.0 million, supported by higher metal and non-ferrous pricing.

• Safety performance reached record lows in lag indicators, and employee engagement remained high during significant organizational change.

• Statutory NPAT was $2.4 million, impacted by non-recurring items such as asset impairments and restructuring costs.

• Strategic focus on margin improvement, operational efficiency, and cash generation drove the turnaround, especially in North America.

Financial highlights

• Underlying EBITDA rose 48.1% to $430.0 million year-over-year, with EBITDA margin improving to 5.7% from 4.0%.

• Underlying EBIT margin increased to 2.3%, and non-ferrous trading accounted for 34% of group revenue, up seven percentage points.

• Net operating cash flow was $297 million, including a $66 million tax payment related to a prior year asset sale.

• Net debt at $332.3 million, with gearing at 19.0% and leverage metrics outside preferred range.

• Full-year dividend of $0.23 per share, up 130% year-over-year, fully franked.

Outlook and guidance

• Non-ferrous markets and SLS expected to remain robust in FY2026, with AI-driven growth and strong trading margins.

• U.S. domestic scrap premiums anticipated to persist, while ANZ ferrous margins remain under pressure from Chinese steel exports.

• Ongoing self-help initiatives and further margin optimization planned for FY2026.

• Long-term fundamentals supported by EAF capacity growth, decarbonisation, and government policies.

• SLS positioned for further growth, leveraging hyperscaler data centre expansion.