Sims Metal Management announced the results of their fiscal year 2015 (FY15). Sales revenue of $6,311 million in FY15 was down 10% compared to FY14, primarily due to lower sales volumes and prices for ferrous metals. Sales volumes decreased by 11% to 10.5 million tonnes in FY15 versus 11.8 million tonnes in FY14, due to lower secondary metal collection levels in North America, Europe and Australia.
North America Metals underlying EBIT of $12 million was up slightly from the prior year. While earnings improved strongly across the East and West regions, business conditions in the Central region remain challenging. Headwinds from severe winter weather, falling commodity prices, and a resulting 14% decline in sales volumes weighed on the overall result.
Underlying EBIT for Europe Metals of $25 million was a significant increase from $17 million in FY14. Underlying EBIT margins of $15 per tonne increased 50% from $10 per tonne in FY14. Europe Metals benefited from past restructuring actions and the adoption of the best practices being shared across the Group’s global operating footprint.
ANZ Metals delivered underlying EBIT of $59 million in FY15, down from $79 million in FY14. Underlying EBIT margins of $32 per tonne remain healthy, but declined from $39 per tonne in FY14. Reduced earnings were primarily due to 9% lower sales volumes and challenging market dynamics.
Global E-Recycling underlying EBIT, excluding discontinued operations, lifted from $17 million in FY14, to $44 million in FY15. Stronger earnings were driven by better performance from Continental Europe and the United States. Performance of this segment is expected to continue to improve as optimisation initiatives take hold and the business transitions in the US and for global clients, to a higher value added and higher margin, service based model.
Commenting on market conditions and the outlook, Mr Claro said, “We are pleased with the progress we achieved in FY15. However, external market conditions for metals recycling remain as difficult as we have experienced in many years. Slowing internal demand in China has pushed exported steel into the markets of many of our traditional customers. China’s recent currency devaluation seems likely to only add more pressure on export markets.”
“Low ferrous scrap metal prices have diminished the economic appeal for collection of more marginal material by our suppliers. As a consequence, we have witnessed deterioration in intake volumes, particularly in North America. Moreover, the level of competition amongst metals recyclers in North America remains high. At current ferrous scrap prices, we presently anticipate intake volumes in FY16 will be similar or slightly lower than in FY15.”
