Sims Lifecycle Services
At the end of 2022, despite a significant rise in the number of IT devices sold by Sims Lifecycle Services (SLS), the company’s profits proved to be lower than expected.
On February 14th, Sims Limited, the parent company of Sims Lifecycle Services, disclosed the organization’s financial numbers for July through December 2022, which marked the first half of 2023 fiscal year.
Fiscal Year 2023
Sims Lifecycle Services reported a total revenue of $167.4 million Australian dollars, which is equivalent to $115.5 million USD. This represented an increase of 0.8 percent compared to the same period last year. However, underlying earnings before interest and taxes (EBIT) was $4.8 million, a year-to-date drop of 29 percent.
During its first half of 2023, SLS underwent a transformation from e-scrap recycling, to ITAD and data center decommissioning services. Stating that, “Our broad capabilities enable us to meet specific program requirements today and new initiatives tomorrow. We process a wide range of asset types, manage complex logistics, offer reuse and recycling services and provide verified data destruction across multiple form factors.”
As a result, the business experienced a 39 percent boost in repurposing IT devices, from 1.8 million to 2.5 million, even “despite supply chain constraints limiting the release of cloud material.”
China Lockdowns Impact Global Market
The financial presentation revealed that the sales prices of Sims Lifecycle Services had declined annually, due to “China lockdowns and consumer sentiment being impacted by high inflation”.
Additionally, a press release highlighted how there was a decrease in underlying EBIT, from margin pressures, as well as inflationary cost increases.
“The opening up of China will be positive for the global metal demand balance and SLS resale prices and volumes, although the timing of this is uncertain,” a press release acknowledged.
Facility Location and Employee Changes
The latest financial review indicated that Sims Lifecycle Services encountered “site closures and realignment of processing capability” during the opening months of 2023 fiscal year. These changes were recorded as part of the detailed filing.
In response to inquiries about which locations were shut down, Sean Magann, chief commercial officer for Sims Lifecycle Services, responded that they “are continuing to right size our locations as we grow as evidenced by our recent expansion into the Atlanta market.”
Over the past twelve months, SLS has made some substantial changes to its ITAD and e-scrap recycling facility list. While the Auckland, New Zealand location is no longer featured on the company website, two new sites in Atlanta and Durham, U.K. have been added. Also, data from SLS’s financial report showed a decrease in the organization’s staff size, with 816 personnel employed during H1 of 2023, compared to 826 in H1 of 2022.
Sims further explained that “as a publicly traded company, our size, financial stability and status provide assurances that compliance and liability promises are backed by a stable and reputable company”.
For the first half of the company’s 2023 fiscal year, Sims Limited outlined a total revenue of $2.64 billion, which was 10 percent lower than in the same period for the previous year. The company’s EBIT decreased by 74 percent, amounting to $64 million compared to the prior-year period.
Sustainability Goals
Sims Lifecycle Services has newly published its three year sustainability goals, “aiming for commitment to use 100% renewable energy and achieve carbon neutrality by 2025”.
“By establishing these measurable goals, we are announcing to our clients and the ITAD industry that we are committed to our purpose, create a world without waste to preserve our planet,” states Sims Lifecycle Services chief financial and sustainability officer, Angela Catt.
“We have a responsibility to our clients – especially those with strict sustainability goals of their own – to operate in a way that manages their material securely, responsibly, and as sustainably as possible.”
