Scrap Industry News

SIMS, HUGO NEU COMPLETE MERGER

Following approval from the Supreme Court of New South Wales, Australia, the merger of Sims Group Ltd. and Hugo Neu Corp.’s recycling operations was completed Oct. 31, creating Sims Co. Ltd.

Sims Co. Ltd., the new holding company, will own 74 percent of the operation, and Hugo Neu will own 26 percent.

Ordinary shares in Sims Group Ltd. were allotted Oct. 31, 2005, and holding statements for the shares issued were sent Nov. 6.

In other news, Sims has reported an after-tax profit of $29.8 million for the first quarter of 2006, a sharp decline from last year’s first quarter figure of $58.1 million.

Responding to the decline in profits, Sims Group Chief Executive Jeremy Sutcliffe says, "The result is consistent with our previous market guidance that earnings would be approximately $30 million. A contraction in ferrous margin accounted for almost the entire difference between this quarter’s earnings and last year’s record first quarter."

Sutcliffe adds, "Encouragingly, however, earnings were ahead of the company’s budget, on the back of a pickup in ferrous prices in late August/September. Ferrous volumes were largely in line with expectation and high base metal terminal prices led to a strong nonferrous result. Profit before interest and tax from our global nonferrous trading operations was up 31 percent."

STATE MEASURES RECYCLING STATUS

The "Recycling Industry Benchmarking and Performance Measurement" report recently released by the Minnesota Office of Environmental Assistance indicates that approximately 60 percent of participating companies exhibited good to superior performance in their Z score, a common measure of a business’s ability to survive.

AMPros Corp. conducted the study on which the report was based with funding from the U.S. Environmental Protection Agency. The study builds on the U.S. EPA’s Recycling Economic Information study that also demonstrates the importance of reuse and recycling businesses to the nation’s economy by evaluating their economic impact.

Individual participating companies were given detailed confidential assessments of their financial and operational performance and the information was consolidated into industry benchmark statistics.

A copy of the "Recycling Industry Benchmarking and Performance Measurement" report is available online at www.moea.state.mn.us/market/benchmark.cfm.