PITTSBURGH Sims Metal Management Ltd. said it is working
on cost cutting and business building strategies in the wake of
another major loss.
The worlds largest metal recycler posted a net loss of
Australian $295.5 million ($304.58 million) for its fiscal
first half ended Dec. 31, down from a A$633.2-million loss in
the same period a year earlier, on revenue that fell 25.2
percent to A$3.43 billion ($3.53 billion) from A$4.58 billion.
The unfavorable results were driven largely by its North
American segment, which saw a reduction in intake to its yards
and shipments to customers. Its North America segment posted an
EBIT (earnings before interest and taxes) loss of A$327.7
million ($337.98 million) vs. a loss of A$578.2 million a year
earlier on revenue that fell 32.9 percent to $2.04 billion
($2.11 billion) from A$3.04 billion. The results reflected an
A$283.7-million impairment charge on its North American assets
amm.com, Feb. 15
) compared with a $A568.3-million
impairment charge in the first half of fiscal 2012 (
amm.com, Aug. 15
The company noted that overall sales were negatively impacted
by a 1.2-million-tonne reduction in shipments, mostly related
to its North America assets, which saw shipments drop to 4.2
million tonnes from 5.4 million tonnes because the recent
recession resulted in less scrap being generated as fewer
vehicles and appliances were replaced.
While we are beginning to see improving economic
fundamentals in our key scrap-generating market in the United
States, the translation into stronger scrap volumes remains
currently challenged as scrap generation typically lags the
fundamentals, group chief executive officer Daniel W.
Dienst said. We continue to chase scrap. But as you start
to see the fundamentals improveauto sales, consumer
confidence, appliance replacementsyoull start to
see material come back into the system.
Sims is working to tighten its belt in North America. The
company has already reduced monthly spending by A$4.7 million,
thus exceeding a corporate goal of A$4 million in monthly
reductions, and hopes to reduce controllable costs in North
America by A$6 million per month by the end of its fiscal year.
The company said it had divested a Tennessee joint venture as
well as nonperforming assets in Arizona and Colorado. It plans
to focus on facilities on the water that can deliver higher
returns, and said its Rhode Island shredder should be
commissioned in September (
amm.com, Aug. 14
). Targeted areas of growth
include the Gulf Coast, New England, Oklahoma and Texas.
The recycler also plans to use its global presence to grow its
electronics recycling platform and expand in or enter emerging