Sims scraps earnings guidance
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Scrap metal recycler Sims Metal Management has downgraded its first half earnings forecast by 20 per cent.
Just four weeks ago Sims forecast its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) in the six months to the end of December to be in the range of $110 million to $120 million.
But on Wednesday it said continued challenging market conditions had forced it to reduce its forecast.
Sims now expects EBITDA in the range of $87 million to $97 million in the six months to December.
The revision was caused mostly by weak intake volumes in its shipping program, and lower demand, particularly by deep sea ferrous buyers.
"Whilst recent positive economic signals in the US, including declining unemployment, positive consumer confidence data and increasing industrial production, is encouraging, the direct benefit to intake volumes and metal recycling margins typically follows at a lag," the company said.
Sims is the world's largest listed metal recycler.
Sims shares were down fallen 21 cents, or 2.3 per cent, at $9.10 at 1043 AEDT.