Sims’ late 2024 earnings decline from 1 year earlier

Sims Ltd., an Australian company that operates metals and electronics recycling facilities predominantly in that country and North America, has reported statutory earnings before interest, taxes, depreciation and amortization (EBITDA) of about $124 million in the second half of 2024. The final six months of 2024 represent the first half of the Sims 2025 fiscal year.

The $124 million figure represents a nearly 35 percent drop in Sims’ EBITDA from a year earlier. The recycling firm's revenue in the second half of 2024 topped $2.3 billion, which is up by 4 percent compared with the $2.22 billion in sales in the final six months of 2023.

In terms of a profitability comparison with one year earlier, Sims says its second half of 2023 results included a one-time $106 million gain on the sale of its former Landfill Management Services (LMS) business. With that transaction set aside, Sims can report a half-year-on-half-year underlying EBITDA increase of 51 percent in late 2024.

"We delivered a strong performance against a challenging market, which many are citing as one of the most difficult in recent times," Sims Group CEO and Managing Director Stephen Mikkelsen says.

In addition to maintaining profitability, Mikkelsen says during the time frame the company significantly reduced net debt while engaging in what he calls “strategic initiatives” in its North American metals business that drove a "significant uplift" in the Sims Metal trading margins, despite lower ferrous prices and broader market headwinds, demonstrating that our strategy is working.

“We continued to challenge ourselves to stay ahead of structural market shifts and are extremely well positioned to capitalize on increasing regionalization and the growing need for supply chain reliability, drawing on our strong domestic network capability," Mikkelsen says.

“As demand accelerates for recycled metals and repurposed technology infrastructure, our focus on margin and cash generation will ensure a strong balance sheet, enabling us to navigate market cycles, reward investors and seize new growth opportunities.”

The company reports its EBIT generated by its SA Recycling partnership in the United States fell by just 20 percent (compared with companywide 35 percent) in late 2024 relative to one year earlier.

The SA Recycling trading margin increased by 2.7 percent, driven by a favorable product mix toward zorba products and the impact of acquisitions, according to Sims. However, these acquisitions, along with inflationary pressures, also added to the cost base.

Sims' Australia and New Zealand metals recycling operations likewise experienced about a 20 percent drop in EBIT in the second half of 2024 compared with the prior year.

While generating smaller revenue and earnings amounts, the company reports its Sims Lifecycle Services (IT asset disposition and electronics recycling) division saw EBIT in late 2024 rise by nearly 70 percent compared with one year earlier.

Sims says the increase was driven by strong market conditions and sustained momentum in major cloud service activity, supported by increasing demand for data centers to support artificial intelligence advancements.

The company expects ferrous prices and intake volumes to “remain dynamic to regional market influences," while global steel overcapacity and China’s elevated exports are expected to continue.

Sims also says nonferrous recycled metal demand has “a robust foundation,” noting it likely will be reflected in continued solid volumes and prices.