Pinched this off Egoli site,Scrap starting to turn .......

Pinched this off Egoli site,

Scrap starting to turn .... Hopefully recent market jitters even out before CMA come back on board........


Sims' revenue drops, forecasts earnings growth
Ben Larsen
Sims Metal Management Limited (SGM) said sales revenue for the nine months ended 31 March 2010 of $5 billion was down 31% on the prior corresponding period. The company also said it expects earnings growth in the fourth quarter.

Sims posted a net profit of $70.4 million in the nine-month period, while EBITDA dropped 23% to $214 million.

The company said earnings per share for the nine months was 37c.

Scrap intake and shipments were 9.7 million tonnes and 9.2 million tonnes respectively.

Looking at the March quarter alone, the company reported sales revenue of $1.6 billion and a net profit after tax of $30.4 million. EBITDA totaled $78 million and earnings per share for the quarter was 16 cents.

Sims said scrap intake and shipments were 3.1 million tonnes and 2.6 million tonnes respectively.

CEO, Daniel W. Dienst, said the company is seeing significantly improved scrap flows in the fourth quarter, particularly in North America.

The cost efficiencies achieved over the past 18 months have positioned Sims Metal Management to take advantage of our competitive position and will provide tremendous operating leverage as and when scrap intakes normalize, Mr Dienst said.

As of 31 March 2010, Sims said it had net debt balances of approximately $0.6 million, against shareholder equity of $3.0 billion.

The company said notwithstanding recent volatility and commodity price declines, global trading conditions for both ferrous and non-ferrous commodities generally improved from the end of the second quarter of FY10.

The company was a judicious seller of ferrous scrap in its third quarter, as evidenced by the 500,000 tonne difference between intake and shipments, Sims said.

The company said it has increased scrap intake in its fourth quarter despite pricing dislocations.

The recent improvement in intake, particularly in North America, is subject, longer term, to economic recovery and stability in the markets in which the company operates and trades, Sims said.

Absent a significant decline in commodity prices from its third quarter, or adverse global economic developments, the company expects sequential earnings growth in its fourth quarter.

At the close of trade Wednesday, Sims shares were trading at $20.35.