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Sims Metal Management Announces Fiscal 2013 Half Year Results

Mr. Dienst continued, "Despite challenging market conditions and global headwinds, we remain intensely focused on aspects of our business within our control, such as operating costs and optimisation of our asset portfolio. In our North America Metals business we reduced controllable costs by $4.7 million per month, exceeding management's previous guidance of $4 million per month. In our UK Metals business controllable costs were trimmed by $0.8 million per month and are on track to reach a run rate of $1.5 million per month in the second half of Fiscal 2013. On top of gains made in North America and the UK, our Australia Metals operations reduced controllable costs by an additional $10 million compared to the previous corresponding period with additional savings expected in the second half."

Mr. Dienst stated, "We continue to optimise our asset portfolio to achieve the highest possible return on investment throughout the cycle. In North America we divested three underperforming businesses and recycled some of that capital into growing our platforms with more attractive return characteristics in the New England and the Gulf regions. We have also grown our Australian Metals platform, our strongest returning business, through expansions in Western Australia and most recently with an acquisition in South Australia. We also expanded Sims Recycling Solutions (SRS) with two acquisitions in North America.

Mr. Dienst stated, "We applaud the effort of our teammates across the globe for their incredible resilience and preparedness in the face of multiple storms which have recently struck in regions we operate. Be it Superstorm Sandy in the US or flooding and fires in Australia, our people have done a great job preparing our sites, securing our equipment, and most critically, keeping our people safe."

North America

Sales revenue was down 33% from the prior corresponding period at $2.0 billion and statutory EBIT was a loss of $328 million. Underlying EBIT was circa $2 million. Results for the first half Fiscal 2013 in North America were impacted by significant items that decreased EBIT by $330 million, $291 million of which relates to goodwill and other intangible asset impairment charges, $15 million of fixed asset impairment, and circa $11 million of losses on sale of businesses. Other adverse significant items included among other items, Superstorm Sandy related costs, redundancy provisions, and net realisable inventory adjustments. Scrap intake in North America declined by 22% on the prior corresponding period to 4.3 million tonnes and shipments declined by 23% to 4.2 million tonnes.

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