Sims Metal Management blames US economy for US$614 million write-down

Friday, 10 February 2012 01:59:59 (GMT+2)

Australia-based metal recycler Sims Metal Management announced Thursday that in its half year earnings there will be a write-down of assets totaling US$614 million before taxes. The write-down can be attributed to the timing and valuation of significant and material acquisitions of traditional scrap metal recycling companies--specifically in North America--prior to the severe global economic downturn and US recession that negatively impacted the traditional scrap metal recycling industry.

For the first half of fiscal year 2012, Sims stated it would post earnings before interest, taxes, depreciation and amortization (EBITDA) of US$141 million--a US$3 million increase from last year's EBITDA earnings of US$138 million. Again, the first half results were attributed to the North American segment with difficult operating conditions for the traditional metals business. The unfavorable conditions impacted operating margins and equity accounted profits of joint venture partners during the first half of the fiscal year.

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