Sims Limited delivered a striking FY26 turnaround with net profit soaring 1391%, driven by strong metals trading and a booming technology lifecycle services segment, while advancing sustainability and strategic acquisitions.
- Net profit jumps 1391% to A$245.3 million
- Sales revenue rises 6.9% to A$8.0 billion
- Sims Lifecycle Services EBIT up 430%, repurposed units nearly double
- Acquisition of Tri Coastal Trading expands North America footprint
- New emissions reduction targets set for 2030 and 2035
Profit Explosion Amid Metal Market Strength and AI Infrastructure Growth
Sims Limited (ASX:SGM) has stunned the market with a 1391% jump in net profit attributable to members for the year ended 30 June 2026, soaring to A$245.3 million from a loss of A$19.0 million the prior year. This dramatic turnaround was underpinned by a 6.9% lift in sales revenue to A$8.0 billion and a 167.6% increase in underlying EBIT to A$468.0 million.
Driving this performance were robust trading margins in North America Metal (NAM) and SA Recycling (SAR), alongside an exceptional surge in Sims Lifecycle Services (SLS), the company’s technology lifecycle business. SLS’s underlying EBIT skyrocketed by 429.8% to A$172.7 million, powered by a 90.9% increase in repurposed units reflecting strong demand from hyperscalers and data centre expansion amid AI infrastructure buildouts.
Strategic Acquisitions and Portfolio Optimisation Strengthen North American Position
The acquisition of Tri Coastal Trading (TCT) in Houston for A$94.8 million in February 2026 bolstered Sims’s North American metals platform, enhancing scrap procurement, trading, and export capabilities in a key Gulf Coast region. NAM’s underlying EBIT grew 69.7% to A$135.9 million, supported by higher non-ferrous prices and increased sales volumes, while SAR nearly doubled its EBIT contribution to A$235.5 million.
Despite ongoing headwinds from elevated Chinese steel exports weighing on Australia and New Zealand (ANZ) ferrous markets, ANZ Metal delivered a resilient performance with sales revenue up 12.7% to A$1.78 billion, driven by non-ferrous growth. However, ANZ’s underlying EBIT declined 22.7% to A$55.8 million due to softer ferrous margins and freight cost pressures.
Sims Lifecycle Services Emerges as Growth Engine Amid AI Infrastructure Demand
SLS’s transformation from traditional IT asset disposition to a strategic partner in Data Centre Infrastructure Services is paying dividends. The segment’s revenue surged 77.4% to A$757 million, with underlying EBIT margin expanding to 22.8%. Elevated DDR4 memory prices, driven by constrained supply and hyperscaler investment in AI, supported robust resale pricing and volume growth.
With ongoing investments in robotics, automation, and new facilities in Ireland and India, SLS is well positioned to capture the growing complexity and scale of AI infrastructure refresh cycles. The segment now contributes nearly 37% of Sims’s underlying EBIT, reflecting a successful diversification beyond metals recycling.
Disciplined Capital Management and Dividend Growth
Sims maintained a strong balance sheet with net debt of A$358.3 million, slightly up from A$332.3 million in FY25, alongside operating cash flow of A$423.6 million. Capital expenditure totalled A$203.4 million, including sustaining and growth investments such as the Pinkenba fines plant and Auckland metal recovery facility.
The Board declared a fully franked final dividend of 20 cents per share, bringing total dividends for FY26 to 34 cents per share, up 47.8%. The dividend reinvestment plan will not operate for the final dividend.
Sustainability Leadership with New Emissions Targets and Safety Excellence
In sustainability, Sims set new interim targets to reduce absolute Scope 1 and 2 greenhouse gas emissions by 7–10% by 2030 and 13–16% by 2035 from a FY26 baseline, supporting its net zero aspiration by 2050. The company continues to source 100% renewable electricity across operations and achieved a 50% reduction in market-based emissions compared to FY20.
Safety performance remained industry-leading, with a Total Recordable Injury Frequency Rate (TRIFR) of 1.09 and high completion rates across critical safety leading indicators. Sims also improved gender pay equity metrics and increased female representation in executive and board roles.
Board and Leadership Updates Reflect Strategic Focus
The Board welcomed Nancy Novak as an Independent Non-Executive Director in December 2025, bringing expertise in AI, robotics, and digital infrastructure aligned with Sims Lifecycle Services’ growth trajectory. Leadership changes included Rob Thompson’s appointment as President of Global Metal, succeeding John Glyde who transitioned to a strategic advisory role after 42 years with the company.
What to Watch Next
Looking ahead, Sims expects continued margin discipline in its metals businesses amid ongoing Chinese steel export pressure in ANZ, while benefiting from US tariffs and electric arc furnace capacity growth. SLS’s first-half underlying EBIT is guided between A$75 million and A$90 million, with DDR4 fundamentals remaining strong but decommissioning timing variable.
Investors will be watching how Sims balances growth investments, capital efficiency, and sustainability commitments amid macroeconomic uncertainty and evolving market dynamics in metals recycling and AI-driven technology lifecycle services.
Bottom Line?
Sims Limited’s FY26 results mark a decisive shift, with metals and AI-driven lifecycle services fueling a robust profit rebound and sustainability commitments setting the stage for long-term resilience.
Questions in the middle?
- How will Sims manage margin pressures in ANZ amid persistent Chinese steel export challenges?
- Can Sims Lifecycle Services sustain its rapid growth as AI infrastructure evolves beyond DDR4 memory cycles?
- What capital allocation priorities will the Board pursue to balance growth, dividends, and emissions reduction targets?