Sims Metal Management (SMM), based in New York City, has reported annual revenue of $7.5 billion and a net profit after tax of $126.7 million for the fiscal year ended June 30. Net profit after tax in fiscal 2010, on an underlying basis, was $146.7 million.
In reporting its annual numbers, SMS notes that sales declined 14 percent in light of a drop in shipments and average selling prices as well as an from adverse effects from foreign exchange rates.
While acknowledging the challenging business environment, Daniel Dienst, Sims Group CEO, says, “We faced significant challenges in the fiscal year just completed as major Western economies attempted to navigate from crisis to recession to recovery. Our nonferrous metals business achieved healthy margins and strong year-on-year growth, confirmation of a core competency as we buy locally and market globally these metals.”
Dienst says the company’s electronics recycling business, Sims Recycling Solutions (“SRS”), was a positive contributor for the year. Meanwhile, the ferrous markets were difficult, with both margins and flows disappointing, particularly in North America.
“Our North American metals business continued to face difficult conditions in fiscal 2010 as a result of diminished scrap flows and tight ferrous margins consistent with the weak and uneven U.S. economic recovery,” Dienst adds.
“We have taken the position that we will use this point in the cycle to invest in our business and bolster our trading and processing capabilities. To that end, we created a new ferrous metals trading platform in fiscal 2010 called North America Trade that we expect will expand our penetration of the market and enhance our ability to market and trade third-party generated material in North America thereby complementing our already strong global ferrous trading platform.”
Dienst continues, “We continue to seek opportunities to execute on our industry consolidation strategy in North America and we are confident that Sims Metal Management will generate high returns on capital in this historically scrap rich market as and when economic conditions permit a return to more normal flows and margins.”
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