NEW YORK Sims Metal
Management Ltd. expects to write down about Australian $115
million ($113.6 million) in its fiscal second half, the company
said late May 14.
The write-downs stem from costs
related to management changes, restructuring, landfill
provisions and inventory re-evaluations following an
investigation launched by the New York-based company" in
amm.com, Jan. 22).
The impact of inventory
write-downs and associated landfill provisions is estimated to
be around A$45 million, ($44.5 million), the company said.
"These provisions relate in part
to strategies being implemented to rebase and enhance the
ongoing competitive commercial profile of the business by
marketing slow-moving inventories more quickly and, in other
instances, to landfill certain lower-value material in the
furtherance of operational efficiencies," Sims said. "This is
in addition to the previously announced inventory write-downs
amm.com, Feb. 15), bringing the total inventory
write-downs to be circa A$61 million ($60.3 million) for fiscal
Also contributing to the
write-down was an A$8-million ($7.9-million) provision for
write-downs from other "significant items," the nature of which
was not disclosed by the company.
Sims anticipates an additional
A$42 million ($41.5 million) in impairment charges, as
"determinations are also expected to be made that the carrying
value of certain fixed assets (in the United Kingdom) will
exceed the value of their projected cash flows."
It also expects an impairment charge of about A$20 million
($19.8 million) to come from shuttering some facilities as part
of its restructuring exercise in the United Kingdom. The
company did not disclose which facilities it is likely to
close; details should emerge in August during its next earnings