Sims Limited reported a 4.1% increase in sales revenue to A$7.494 billion for FY25, alongside a 48.1% jump in underlying EBITDA to A$430 million. Despite a statutory net loss, the company declared a fully franked final dividend of 13 cents per share, reflecting confidence amid market challenges and portfolio reshaping.
- Sales revenue up 4.1% to A$7.494 billion
- Underlying EBITDA increased 48.1% to A$430 million
- Statutory net loss narrowed to A$19 million
- Final dividend declared at 13 cents per share, 100% franked
- Strategic sale of UK Metal business and growth in Sims Lifecycle Services
Solid Revenue Growth Amid Challenging Markets
Sims Limited has delivered a robust financial performance for the year ended 30 June 2025, with sales revenue climbing 4.1% to A$7.494 billion. This growth was driven by a 4.0% increase in metal average sales prices, buoyed by strong non-ferrous metals pricing, despite a 3.8% decline in overall metal sales volumes. The company’s strategic focus on unprocessed scrap and margin improvement, particularly in North America, helped offset subdued demand and challenging ferrous market conditions globally.
Significant Earnings Improvement and Dividend Declaration
Underlying EBITDA surged by 48.1% to A$430 million, reflecting operational efficiencies, cost reductions, and contributions from the 50% equity interest in SA Recycling. Underlying EBIT rose nearly threefold to A$174.9 million. However, statutory EBIT was impacted by significant items including asset impairments and restructuring costs, resulting in a net loss of A$19 million, a substantial improvement from the prior year’s A$57.8 million loss. The Board declared a fully franked final dividend of 13 cents per share, payable on 15 October 2025, signaling confidence in the company’s cash flow and capital management.
Strategic Portfolio Reshaping and Growth Initiatives
FY25 saw the completion of the sale of Sims’ UK Metal business, simplifying the portfolio and strengthening the balance sheet. The deferred payment component of this sale is subject to refinancing discussions, introducing some uncertainty in cash flow timing. Sims Lifecycle Services, the company’s IT asset recycling arm, recorded a 22% revenue increase, driven by rising demand linked to AI adoption and data center expansion. Investments in technology and operational upgrades, such as shredder enhancements and automation projects in North America and Australia/New Zealand, underpin Sims’ growth strategy.
Market Dynamics and Outlook
The ferrous scrap market remained volatile due to global steel oversupply, particularly from Chinese exports, and tariff-induced trade policy shifts. Despite these headwinds, tariff protections in the US supported domestic demand and margins. Non-ferrous metals markets showed resilience, contributing to earnings stability. Looking ahead, Sims anticipates continued robust demand for non-ferrous materials and expects tariff support to benefit US operations in FY26, while Chinese steel exports remain a significant challenge. The company’s capital discipline is evident in a net debt reduction to A$332.3 million and a gearing ratio of 18.8%, maintaining financial flexibility.
Governance, Sustainability, and Leadership Changes
Sims maintained its commitment to sustainability and safety, achieving record low injury rates and surpassing emissions reduction targets. The Board and executive team saw several changes, including new appointments and retirements, aligning leadership with strategic priorities. Executive remuneration outcomes reflected strong financial and non-financial performance, with incentives linked to EBIT growth, safety, and sustainability goals. The company continues to enhance its climate-related disclosures in line with emerging Australian Sustainability Reporting Standards.
Bottom Line?
Sims Limited’s FY25 results underscore resilience and strategic agility, but investors should watch the UK Metal deferred payment and ferrous market headwinds closely.
Questions in the middle?
- How will the refinancing of the UK Metal deferred payment impact Sims’ cash flow in FY26?
- Can Sims sustain margin improvements amid ongoing Chinese steel export pressures?
- What growth trajectory can be expected from Sims Lifecycle Services as AI adoption accelerates?