Sims releases financial data
By Editorial Staff, Resource Recycling
Sims Metal Management has announced financial results for the first half of its 2013 fiscal year, which ended Dec. 31, and now reflect the inventory write down as result of an investigation of two U.K. scrap facilities.
The inventory adjustment was undertaken on the recommendation of a committee formed by the board of directors to investigate discrepancies and possible fraud at the company's U.K. e-scrap businesses in Long Marston, England and Newport, Wales. The result was a $78 million write down of the firm's U.K. inventory, with $17 million of that total reflected on the 1H FY2013 results. The remainder was reflected in restatements of Sims' FY2010, FY2011 and FY2012 filings, since the inventory discrepancies mostly affected those periods. In the wake of the investigation, the company says it will be simplifying its Sims Recycling Solutions and U.K. Metals operations with an emphasis on discipline and enhanced inventory controls.
Total revenue for the first half of FY2013 was down 25 percent, versus the same period in FY2012, to $3.4 billion, with a net loss after tax of $295.5 million. Net profit after tax was $10 million. The company mostly attributed this to a reduction of intake and shipments in North America.
Interestingly enough, Sims Recycling Solutions, the company's electronics recycling division, was the only one of Sims' six businesses to see positive growth compared to the same period last year. SRS had sales revenue of $522.2 million in the first half of FY 2013 — up 5.1 percent over the same period in FY 2012. Overall, SRS represents 15.2 percent of Sims' sales revenue.