A loss for metal recycling business Sims Metal in the year to June – a big loss of $265.3 million for the full financial year on a statutory basis after COVID-19 lockdowns across the globe slashed its scrap metal intake and profit margins.
Sales revenue plunged 26.1% to $4.91 billion for the year, due to both lower prices for its metal and lower volumes.
The more than a quarter of a billion loss was a big turnaround from the $152.6 million net profit in 2018-19.
But there’s a hint of better times as Sims noted there had been an improvement in July.
“Despite the very difficult trading conditions that prevailed for the majority of FY20, the Company, including all Metal divisions, returned to profit for the month of July 2020,” the company said in the statement on Tuesday.
Despite what might be called a green shoot, Sims directors did not have the confidence to pay a final dividend.
As a result all shareholders get for 2019-20 is the six cents a share interim paid earlier this year. That’s sharply lower than the 42 cents a share paid for 2018-19.
“Our rapid response to protect employees and the community limited the disruption of this essential service. However, severe COVID-19 lockdowns across the UK, North East US and New Zealand materially reduced intake volumes and sales prices,” said Sims CEO Alistair Field said yesterday.
“Management has responded to the tough market conditions with an extensive restructuring and cost reduction program that will achieve its full run rate of $70 million in financial year 2021,” he said.
Sims’ full-year statutory loss includes $72 million of intangible impairments, $50.2 million of tangible asset impairments and $35.2 million of restructuring and redundancy costs.
On an underlying basis, Sims reported a net loss of $58.1 million, down from a $161.9 million profit last year.
A bad year on all measures, but hopes of better times to come.
The shares eased 1% to $8.35.