Sales revenue was in line with the prior corresponding period at USD 6.0 billion and EBIT was a loss of USD 616 million. Underlying EBIT was circa USD 1 million. Results for Fiscal 2012 in North America were impacted by significant items that decreased EBIT by USD 617 million, USD 568 million of which relates to non-cash goodwill impairment charges (including non-cash goodwill impairment in a joint venture) and which were recorded in the first half of Fiscal 2012. Other adverse significant items were circa USD 49 million including among other items net realizable inventory adjustments, settlement of a dispute with a third party, final settlement of a business arrangement, credit loss in a customer bankruptcy and redundancies. Scrap intake in North America declined by 1% on the prior corresponding period to 10.9 million tonnes and shipments increased by 1% to 11.1 million tonnes.
Mr Daniel W Dienst CEO of Sims Metal Management Limited stated that "Our North America Metals business faced significant headwinds and challenges again in Fiscal 2012. Scrap intake and shipments were in line with the prior corresponding period, but a challenging set of global economic conditions and the impact of adverse significant items resulted in a statutory loss. In an effort to streamline operations for North America Metals, we consolidated our leadership team and embarked on a restructuring effort in the second half. This restructuring is expected to reduce controllable expenses by circa USD 4 million per month during Fiscal 2013. Reducing controllable expenses became a priority as a measure to offset margin compression and to align resources with tight scrap flows and generally weak market conditions. Fiscal 2012 marked the completion of the first application of proprietary downstream technology at our North American shredders. Our Sims Recycling Solutions business in North America once again performed well, achieving good results in this rapidly expanding market."
He added that "During Fiscal 2012, we formed a new business with the acquisition of Promet Marine Services in Providence, Rhode Island. This new export facility serves as the foundation for the formation of our New England platform. During Fiscal 2012, we also expanded through acquisitions in Oklahoma, New Jersey and North Carolina. Additionally, we acquired early in our Fiscal 2013 the assets of a multi-yard business centered in Mobile, Alabama. These acquisitions are part of our strategy to expand into markets that are traditionally underserved by scrap processors and where we have the ability to gain an attractive market position at the source of materials."
Sales revenue was down 10% on the prior corresponding period to USD 1.2 billion. EBIT was USD 93 million in Fiscal 2012, higher by 18% on the prior corresponding period. Underlying EBIT was circa USD 67 million. Results for Fiscal 2012 in Australasia were impacted by significant items that increased EBIT by USD 26 million, USD 36 million of which relates to a gain on sale of a business by a joint venture offset by other adverse significant items of USD 10 million including a non cash goodwill impairment charge, net realizable inventory adjustments, and redundancies. Scrap intake and shipments for Fiscal 2012 were 1.8 million tonnes each. Intake was higher by 3% on the prior corresponding period while shipments were in line with the prior corresponding period.
In February 2012, the company and Nyrstar NV completed the sale of Australian Refined Alloys' secondary lead producing facility in Sydney to companies associated with Renewed Metal Technologies for a total sale price of approximately USD 80 million. The Company realized a profit on the sale of its 50% share of ARA’s Sydney facility of approximately USD 36 million, while retaining ARA’s secondary lead producing facility in Melbourne, which will continue to be owned as a 50:50 JV.
Mr Daniel W Dienst CEO of Sims Metal Management Limited stated that "Our Australasian business remained solid in Fiscal 2012, once again demonstrating its strong position and excellent execution in this mature market. This region produced attractive returns on invested capital and continued to expand through successful deployment of technology and careful integration of bolt-on acquisitions. We will continue to invest and expand in this important region."
Sales revenue was up 20% on the prior corresponding period to USD 1.8 billion and EBIT decreased by 92% to USD 8 million. Underlying EBIT was circa USD 56 million. Results for Fiscal 2012 in Europe were impacted by significant items that decreased EBIT by USD 48 million. The significant items consisted of primarily USD 42 million of non-cash goodwill impairment charges recognized in the traditional metals recycling business in the U.K. Scrap intake and shipments in the region increased by 12% and 13%, respectively, on the prior corresponding period. Unit growth mostly relates to the Dunn Brothers acquisition that was completed late in Fiscal 2011. Intake and shipments were each circa 1.7 million tonnes during Fiscal 2012.
Mr Dienst said that "Our European business had a disappointing performance during fiscal 2012 as our UK Metals business struggled with weak scrap generation and tight margins. At the end of fiscal 2012, our UK Metals business implemented a rationalization plan to reduce costs and align resources with slower intake and to defend margins. We believe this rationalization will reduce costs by circa USD 1.5 million per month beginning toward the end of the first half of fiscal 2013. Despite challenging results from the scrap metal business the European region remained profitable due to earnings contributions from SRS in Continental Europe, though earnings for SRS in Europe were lower than the prior corresponding period. This is a result primarily of lower commodity price realizations and macro factors. Growth in SRS is evident in both improved volumes and from new global customer relationships, as well as enhanced recoveries from investments into processing technology. During Fiscal 2012, we completed the acquisition of S3 Interactive, a business focused on smart phone and tablet recycling that is a fast growing market."
Source - Sims Metal Management Limited