NEW YORK Sims
Metal Management Ltd. can better integrate its operations
across geographies and business units, new chief executive
officer and managing director Galdino Claro said at the
companys annual general meeting this week.
Sims operates more
than 270 facilities in 20 countries across five continents.
"In some regions our
returns are best in class, while in other markets we struggle
to break even. We need to leverage the scale of the business
platform to learn from our own best-in-class operations and
show that being the largest listed metal and electronics
recycler in the world has greater value than simply bragging
rights," Claro said.
It is critical that
the company manages the aspects of the business within its
control as the timing of a recovery in steel and scrap markets
remains uncertain, Claro said.
"The company remains
committed to maintaining capital discipline and low gearing,
continuing efforts to reduce controllable costs and improving
synergies across our businesses. While we expect near-term
challenges to persist, we remain optimistic in the long-term
earnings potential of our global platform," he said.
Over the past four
months, the New York-based company has reported mixed results
across its various locations.
In the first half of
Sims 2014 fiscal year, which started July 1, North
American market conditions and results remain challenged due to
weak scrap generation and intense competition for raw
materials, Claro said.
Earnings from its
operations in Australasia are trending higher, reflecting
higher intake volumes and improved export sales margins, while
restructuring of its metals business in the United Kingdom has
brought improved results, he said.
Ferrous scrap markets
have recently strengthened after softening in September and
early October, with demand for ferrous scrap in the
Mediterranean Basin and in Asia staying firm, Claro said.
"Ferrous scrap prices
have increased by roughly $40 per tonne in the Mediterranean
Basin and by about $35 per tonne in Asia since early July.
Despite our expectations for firm ferrous scrap prices, near
term, we believe it is unlikely these higher prices will
translate into meaningfully improved margins due to intense
competition for unprocessed raw materials in North America," he