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Steep decline in sales revenues for SMM

Global – Australia-based Sims Metal Management (SMM) has experienced a sharp drop in sales revenues, according to the company’s latest annual report.

Sales revenues of A$ 7.2 billion (Euro 4.8 billion) in fiscal year 2013 compared with A$ 9 billion (Euro 6 billion) in the previous year. The decrease is a result of a combination of lower average ferrous and non-ferrous scrap prices as well as lower sales volumes, which fell 12% year on year to 12.8 million tonnes.

Chairman Geoffrey N. Brunsdon comments: ‘The past year was a challenging one for Sims as it continued to face weak commodity markets and intense competition for raw materials. At the same time, the company has been managing significant organisational change.’ Certainly, he added, it was ‘the most challenging year since the start of the global financial crisis, and perhaps the most challenging year the company has faced since it was floated as Simsmetal Limited on the ASX over 20 years ago’.

At a macro level, the metals recycling industry continued to face weak commodity markets and falling prices for ferrous and non-ferrous scrap. Competition for unprocessed material remained intense across all markets – ‘and in particular the critical US market’, SMM states.

SMM has identified a breakdown in its internal control environment as leading to a ‘significant overstatement’ of the value of inventories at two of its UK-based facilities. The company’s loss after tax of A$ 466 million (Euro 312 million) led the board to decide against paying a dividend.

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