Metal recycler Sims has reinstated its interim dividend, with a 12 cents a share fully franked payout after returning to profit in the six months to December.
Sims on Tuesday revealed a first half profit of $53 million for the six months to December, compared to the $91 million loss in the same period in 2019 that included asset impairments.
The company said statutory earnings increased 481% to $177 million (because of the absence of the impairment in the latest figures)
Sales revenue dropped in late 2020 to to be more than 9% lower for the year at $2.4 billion as its mix of scrap metal changed towards iron (ferrous) type products as world prices for key metals such as copper and nickel rose.
Sales revenue was lower because of a higher mix of ferrous metals, which fetches a lower price than non-ferrous metals, and volumes fell from 4.5 million tonnes to 4.3 million tonnes.
“Partially offsetting lower sales volumes were higher prices, particularly during November and December 2020 when market prices improved,” Sims told the market this morning.
It also noted China was relaxing import restrictions on scrap metal, which “puts the group in a strong position to continue to deliver its growth strategy and grow its non-ferrous and ferrous businesses”.
Also helping Sims performance has been intense cost cutting and the company says its 2020-21 costs should be more than $70 million lower than the previous fiscal year.
It did not provide guidance for the rest of the year, but said ferrous metal prices were likely to remain resilient in the medium term.
And a return to normal car making volumes around the world should support prices.
Shares jumped more than 7% to $13.75 on Tuesday.
