Sims Reports $174.9M EBIT, 49% Emissions Cut, and 23c Dividend in FY25
Sims Limited reports a stellar FY25 with underlying EBIT nearly tripling, driven by strategic growth and sustainability achievements, while setting an ambitious outlook for FY26 amid market challenges.
- Underlying EBIT jumps nearly 200% to $174.9 million in FY25
- Achieved 49% reduction in Scope 1 and 2 emissions, surpassing 2025 targets
- Declared fully franked final dividend of 13 cents per share, totaling 23 cents for FY25
- Strong growth in Sims Lifecycle Services with 84% EBIT increase
- Board refreshed with two new members adding industry expertise
Robust Financial Performance Amid Strategic Execution
Sims Limited delivered a remarkable financial turnaround in fiscal year 2025, with underlying earnings before interest and tax (EBIT) soaring by nearly 200% to $174.9 million. This surge was underpinned by disciplined cost management, a sharpened focus on higher-margin unprocessed materials, and the successful divestment of its UK Metals business. The North American segment notably contributed a $93 million EBIT improvement, while SA Recycling expanded its footprint through several bolt-on acquisitions, further strengthening its market position.
Sustainability Milestones Cement Leadership in Circular Economy
At the heart of Sims’ strategy lies a commitment to sustainability, which bore fruit in FY25 with the company surpassing its 2025 climate targets. Sims achieved a 49% reduction in Scope 1 and 2 emissions against its 2020 baseline, far exceeding the initial 23% goal, and transitioned to 100% renewable electricity across all operations. Additionally, Sims Lifecycle Services reached carbon neutrality, marking a significant milestone in its decarbonization journey. These achievements underscore Sims’ role as a pioneer in the circular economy, providing recycled materials that help reduce global emissions.
Dividend and Capital Management Reflect Confidence
Reflecting its strong financial position, Sims declared a fully franked final dividend of 13 cents per share, bringing the total dividend for FY25 to 23 cents. The company emphasized its capital management framework focused on maintaining a robust balance sheet, funding strategic growth, and returning value to shareholders. Sims also plans to continue recycling capital from non-core assets to support expansion opportunities, particularly in high-growth regions.
Growth in Technology-Driven Recycling Services
The Sims Lifecycle Services division experienced an 84% increase in EBIT, driven by rising demand from hyperscale data centers and the expanding influence of artificial intelligence. This segment’s growth highlights Sims’ ability to innovate and capitalize on emerging technology trends, positioning it well to meet the increasing need for repurposed materials in a data-driven world. Expansion into Europe remains on track, further broadening the company’s global footprint.
Outlook and Challenges Ahead
Looking forward to FY26, Sims anticipates a meaningful improvement in underlying EBIT for the first half compared to the previous year, despite ongoing headwinds in ferrous markets caused by elevated Chinese steel exports. The company expects continued strength in non-ferrous streams and lifecycle services, while acknowledging challenges in meeting its ambitious 2030 emissions targets. The Board’s recent refresh with the addition of Shinichiro Omachi and Russell Rinn aims to bolster strategic leadership as Sims navigates these complexities.
Bottom Line?
Sims Limited’s strong FY25 performance and sustainability leadership set the stage for growth, but market and climate challenges loom.
Questions in the middle?
- How will Sims address the challenges in meeting its 2030 emissions reduction targets?
- What impact will the expected write-down on UK Metal receivables have on near-term profitability?
- How will Sims Lifecycle Services sustain its rapid growth amid evolving technology demands?
