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Sims Metal Management Announces Fiscal 2013 Half Year Results

As investors are aware, the Company's dividend policy is to distribute 45% to 55% of NPAT, subject to the Board's discretion. In the absence of statutory NPAT, even after looking through goodwill impairment, the Company has determined not to pay a dividend for the first half Fiscal 2013 period. The Company's dividend policy remains unchanged.

In the first half of Fiscal 2013, the Company's total scrap intake and shipments were 6.0 million tonnes and 5.9 million tonnes, respectively. Scrap intake and shipments decreased 18% and 17%, respectively, on the prior corresponding period, and mostly in North America.

On 15 February 2013, the Company reported that the impact of the UK matter resulted in inventory write-down adjustments in the UK of circa $78 million, of which $17 million would impact the first half results of Fiscal 2013. The remainder of the impact of the UK matter resulted in the restatement of Fiscal periods 2010, 2011, and 2012, which is provided in Note 2 of the financial statements as of 31 December 2012.

Results at a Glance    
(in A$ millions)    
    Restated
STATUTORY: HY13 HY12
Revenue $3,429 $4,584
EBITDA 1 $33 $100
EBIT  $(321) $(637)
NPAT $(295) $(633)
Diluted loss per share (cents) (144.5) (307.2)
     
UNDERLYING 2:    
Revenue $3,429 $4,584
EBITDA $94 $140
EBIT $31 $76
NPAT $10 $42
Diluted earnings per share (cents) 4.8 20.0
     
1  EBITDA is an unaudited measurement of non-conforming financial information. See attached table that reconciles EBITDA to statutory net profit (loss). 2  See table attached that reconciles statutory and underlying results.  

Group Chief Executive Officer Daniel W. Dienst stated, "While we are beginning to see improving economic fundamentals in our key scrap generating market in the United States, the translation into stronger scrap volumes remains currently challenged as scrap generation typically lags the fundamentals. Subdued scrap generation, particularly within the consumer segment, negatively impacted sales and margins in the first half, which was compounded by weaker commodity prices and periods of tepid ferrous scrap demand. These conditions led to first half earnings which masks the significant accomplishments made on lowering controllable costs and from optimising our portfolio of assets. There were also a number of significant items recorded in the first half of Fiscal 2013 including $291 million of goodwill and other intangible asset impairment and $17 million of inventory adjustments stemming from the UK matter."

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