Sims Limited reported a 4.1% rise in FY25 sales revenue to A$7.494 billion and a near tripling of underlying EBIT to A$174.9 million, driven by improved trading margins and strong growth in lifecycle services. The company’s strategic focus on decarbonisation and circular economy positions it well for sustained demand, especially from AI-driven data centre expansion.
- Sales revenue up 4.1% to A$7.494 billion despite 1.2% volume decline
- Underlying EBIT jumps 198% to A$174.9 million on margin improvements
- Sims Lifecycle Services EBIT grows 84%, boosted by hyperscaler demand
- Safety metrics improve significantly with record-low injury rates
- Positive FY26 outlook supported by decarbonisation and tariff policies
Robust Financial Performance Despite Volume Challenges
Sims Limited closed FY25 with a solid financial performance, reporting a 4.1% increase in sales revenue to A$7.494 billion. This growth was primarily driven by higher average metal prices and a stronger non-ferrous pricing environment, offsetting a slight 1.2% decline in sales volumes. The volume drop was attributed to weather disruptions in North America and a strategic pivot towards higher-margin unprocessed scrap.
Underlying EBIT surged by 198% to A$174.9 million, reflecting improved trading margins, a stronger contribution from Sims Lifecycle Services (SLS), and disciplined cost management. This remarkable earnings growth underscores the company’s success in executing its margin-first strategy amid challenging market conditions.
Strategic Priorities Driving Operational Efficiency and Growth
The company’s strategic framework focuses on operational efficiency, portfolio optimisation, and growth from a strong supplier and customer network. Key initiatives include increasing unprocessed scrap volumes, leveraging acquisitions such as Baltimore Scrap and Alumisource, and expanding processing capacity. Sims also emphasised its commitment to responsible investment and cash generation, with sustaining capital expenditure focused on plant maintenance and safety.
Safety performance was a standout, with a 41% reduction in total recordable injury frequency rate since FY20 and a record-low lost time injury frequency rate of 0.11 in FY25. This reflects a deeply embedded safety culture supporting reliable operations and strategic delivery.
Sims Lifecycle Services Capitalises on AI and Hyperscaler Momentum
Sims Lifecycle Services delivered an 84% increase in underlying EBIT, outpacing revenue growth. The segment benefits from strong demand for repurposed units driven by hyperscaler data centre expansion and accelerated AI adoption. This shift towards higher-margin, capital-efficient services positions SLS as a key growth engine for Sims, with expectations of continued momentum into FY26.
Market Outlook and Macro Drivers
Looking ahead, Sims remains optimistic about long-term fundamentals. The growth of electric arc furnace (EAF) steelmaking, government policies supporting decarbonisation and onshoring, and sustained non-ferrous demand underpin the outlook. Tariff protections in the US are expected to bolster domestic ferrous scrap demand, while Chinese steel export pressures continue to weigh on global ferrous prices.
The company plans sustaining capital expenditure between A$120 million and A$140 million in FY26, focusing on strategic projects such as the Pinkenba logistics hub and expansions in Queensland and Victoria. Sims also declared a full-year dividend of 23 cents per share, reflecting confidence in cash flow generation and capital discipline.
Bottom Line?
Sims Limited’s FY25 results demonstrate resilience and strategic agility, setting the stage for growth amid evolving decarbonisation and technology-driven scrap demand.
Questions in the middle?
- How will ongoing Chinese steel export pressures impact Sims’ ferrous pricing and volumes in FY26?
- What are the risks and opportunities in scaling Sims Lifecycle Services alongside hyperscaler data centre growth?
- How might tariff policies evolve, and what effect could this have on Sims’ North American and Australian operations?