Sims Limited (ASX: $SGM) reports financial results for the half year ended 31 December 2023

Sims Limited (ASX: $SGM) has reported its financial results for the half year ended 31 December 2023. The company's sales revenue for HY24 increased by 7.4% to $4,114.4 million compared to $3,831.2 million in HY23. The proprietary intake volumes increased by 4.2% to 3.9 million tonnes in HY24.

Executive Commentary on Operating and Financial Review

The metal scrap industry faced a challenging market environment throughout the HY24. Steel demand in the US was solid, while the Turkish metal scrap market confronted hurdles due to increased steel exports from China and ongoing conflicts. The seaborne ferrous scrap market was negatively impacted by a global manufacturing slowdown and escalating geopolitical tensions. The Group's strategic growth plan is expected to be further advanced during the balance of FY24 and beyond.

Outlook and Market Drivers

Sims Limited remains confident in the business's medium and long-term fundamentals. In the short-term, underlying EBIT is expected to improve in H2 FY24 compared to H1 FY24, including $25 million from cost reductions. The company anticipates strong competition for limited scrap supply, geopolitical tensions, and inflation to remain as material risks to an anticipated improvement in H2 FY24. The global decarbonisation of steelmaking, growth of Electric Arc Furnaces, and cloud infrastructure recycling are expected to drive the demand for recycled metal over the medium to long term.