Sims Metal Drops Most Since 2009 on Write-Off: Sydney Mover
Sims Metal Management Ltd. (SGM) fell the most in more than three years in Sydney trading after the world’s biggest recycler of scrap metal said it will book a one- time charge of A$614 million ($664 million) in the first half.
The shares plunged as much as 12 percent, the biggest decline since Jan. 23, 2009, before closing down 7 percent at A$14.20 in Sydney.
Sims will take the non-cash charge to write off goodwill on acquisitions and joint ventures of scrap metal recycling companies, particularly in North America, before the global financial crisis in 2008, the company said today in a statement. New York-based Sims, which has operations in 23 U.S. states, said first-half results were affected by continued difficult operating conditions for the traditional metals business.
“These conditions adversely impacted operating margins and equity accounted profits of joint venture partners,” the company said. It expects to report earnings on Feb. 17.
Underlying earnings before interest, tax, depreciation and amortization, excluding the impairment charge, will be about A$141 million, compared with A$138 million a year earlier, it said. The charge won’t affect its dividend policy, growth strategy and its share buyback plan, Sims said.
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