LONDON Sims Metal Management Ltd. is recording a write-down of Australian $78 million ($80.5 million) on its British inventory, the company said Feb. 15.
The global recycling company formed a special committee last month to investigate inventory valuation issues at the U.K. business (amm.com, Jan. 22). The committee has concluded that the total impairment charge will come to A$78 million, up from a preliminary assessment of about A$60 million ($61.9 million), and Sims said the adjustment had been verified by external auditor PricewaterhouseCoopers LLP.
Following the investigation, the company now believes that it will have to restate its results for fiscal 2010, 2011 and 2012 to account for A$62 million ($64 million) of the inventory writedown, while A$16 million ($16.5 million) will affect its results for the first half of fiscal 2013.
Sims also advised the market in January that it had incurred impairment charges related to goodwill and other intangible assets of A$354 million ($365.4 million) in aggregate. A total of A$291 million ($300.4 million) from the charge is related to North America Metals and will be recorded against fiscal 2013 results, while A$63 million ($65 million) is linked to U.K. Metals and U.K. Sims Recycling Solutions and will be shown in the restatement of results for prior periods.
The company will be filing amended documents with the U.S. Securities and Exchange Commission as soon as possible, Sims added.
The announcement came in the wake of Rio Tinto Plcs $14.4-billion writedown related to its aluminum business (amm.com, Feb. 14) and Barrick Gold Corp.s $3.8-billion writedown related to its copper division (amm.com, Feb. 14).
A version of this article was first published by AMM sister publication Metal Bulletin.