The Sims Ltd (ASX: SGM) share price is in focus today after the company reported a 70.9% jump in underlying net profit after tax (NPAT) to $60 million and a 3.7% lift in sales revenue for the half year ended 31 December 2025.
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What did Sims report?
- Underlying NPAT rose 70.9% to $60.0 million (HY25: $35.1 million)
- Sales revenue grew 3.7% to $3,778.6 million
- Underlying EBIT surged 65.9% to $121.1 million
- Statutory NPAT was a loss of $29.9 million, due to significant one-off items
- Interim dividend increased 40% to 14 cents per share
- Return on Invested Capital improved to 6.2%
What else do investors need to know?
Underlying performance was strong across most business units. Sims Lifecycle Services (SLS) delivered a 247.5% jump in underlying EBIT, driven by robust global demand for used DDR4 chips as hyperscale and AI data centre builds accelerate. Sims' North America Metal (NAM) and Sims Adams Recycling (SAR) divisions both delivered higher trading margins and improved profitability, even as trading in processed scrap reduced sales volumes.
The Australian and New Zealand segment saw softer ferrous markets owing to high Chinese steel exports, but stronger non-ferrous trading offset some of the impact. Capital expenditure dipped while the company's net debt position improved to $306.8 million.
What did Sims management say?
Group CEO and Managing Director Stephen Mikkelsen commented:
Underlying EBIT of $121.1 million is a good solid result in a difficult market and reflects the strength of our strategy and the disciplined execution of key initiatives.
SLS's excellent first half is a reward for the effort and attention we have put into that division over the last five years, and it is satisfying to see the results coming through.
What's next for Sims?
Sims expects continued strong demand for non-ferrous metals, benefiting margins in the US, Australia, and New Zealand. Structural supply pressure on DDR4 chips should support further profitability in SLS, as major technology shifts drive global demand for repurposed hardware.
However, management cautions that high Chinese steel exports will keep regional ferrous prices under pressure in the near-term. The company will continue to focus on disciplined cost management and investment in automation, logistics, and digital transformation to drive long-term growth.
Sims share price snapshot
Over the past 12 months, Sims shares have risen 51%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.
