Sims Limited (ASX:SGM): How Did Recycling and Data Centre Services Shape FY26 Earnings?

Aditi Sarkar

29 October 2026 03:15 PM AEDT

Sims Limited (ASX:SGM): How Did Recycling and Data Centre Services Shape FY26 Earnings?

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Highlights

Sims Limited (ASX:SGM) reported FY26 revenue of AUD 8,007.5 million, up 6.9% YoY.
FY26 underlying EBIT increased 167.6% to AUD 468.0 million; statutory NPAT was AUD 245.3 million.
Sims Lifecycle Services recorded AUD 172.7 million in FY26 underlying EBIT, compared with AUD 32.6 million in FY25.
The FY26 final dividend was AUD 0.20 per share, with total annual dividends of AUD 0.34 per share.

Sims Limited recycles ferrous and non-ferrous metals and provides technology asset recovery and data centre infrastructure services through Sims Lifecycle Services (SLS). Its FY26 results showed higher group earnings, supported by non-ferrous metal margins and SLS activities, while the Australia and New Zealand metals business faced weaker ferrous conditions. During trading on 29 October 2026, Sims Limited (ASX:SGM) shares were quoted at AUD 20.14, down 2.14% for the session. Operational priorities include integrating the North American acquisition, building recovery capacity and managing the timing of data centre equipment decommissioning.

Company Business

Sims Limited (ASX:SGM) operates across metal recycling and technology circularity. The metals business purchases, processes and sells recyclable ferrous and non-ferrous materials, supplying customers such as steelmakers and other industrial processors. North American Metals (NAM) and the Australia and New Zealand (ANZ) business are reported alongside the company’s interest in SA Recycling (SAR), a US joint venture. Metal market pricing and the mix of higher-value non-ferrous material influence realised sales and trading margins.

SLS handles technology equipment and data centre infrastructure, including asset recovery, repurposing and resale. Its activities extend beyond conventional IT asset disposition into services for hyperscale data centre operators. The company has reported investments in facilities, automation and capacity to support this work. The combination exposes group performance to scrap metal flows and pricing as well as activity linked to data centre equipment replacement cycles.

Recent Development

In August 2026, Sims Limited (ASX:SGM) released its FY26 financial results for the year ended 30 June 2026. Proprietary metal intake increased 4.9% to 6.4 million tonnes, while proprietary sales remained broadly steady at 6.3 million tonnes. Higher average metals selling prices and additional sales volumes, including brokerage, helped lift reported revenue. North American volumes reflected improved commercial execution and four months of contribution from the acquired Tri Coastal Trading business in Houston.

SLS processed 16.8 million repurposed units during FY26, up 90.9% YoY. Its revenue growth reflected higher resale values and processing volumes, including demand from hyperscale operators. Operational development also included an additional facility in India, expansion into Ireland and US site projects. In ANZ, Sims advanced non-ferrous recovery projects at Broadmeadows and Pinkenba and work on an Auckland metal recovery plant. These investments sit alongside exposure to changing ferrous market conditions.

Financial Performance and Sector Context

For FY26, Sims Limited (ASX:SGM) recorded sales revenue of AUD 8,007.5 million, compared with AUD 7,494.0 million in FY25. Underlying EBITDA increased to AUD 727.8 million from AUD 430.0 million, and underlying EBIT rose to AUD 468.0 million from AUD 174.9 million. Statutory net profit after tax reached AUD 245.3 million, compared with AUD 2.4 million one year earlier. Underlying net profit after tax was AUD 289.1 million, up from AUD 83.1 million.

North American Metals contributed AUD 135.9 million in underlying EBIT, up from AUD 80.1 million in FY25. Sims’ share of SA Recycling underlying EBIT reached AUD 235.5 million, versus AUD 120.0 million. SLS underlying EBIT rose to AUD 172.7 million from AUD 32.6 million, reflecting higher memory resale prices and equipment processing. By contrast, ANZ underlying EBIT fell to AUD 55.8 million from AUD 72.2 million as ferrous trading margins declined despite higher revenue.

Operating cash inflow was AUD 423.6 million in FY26, compared with AUD 297.1 million in FY25. Net debt stood at AUD 358.3 million on 30 June 2026, up from AUD 332.3 million a year earlier. The group declared a fully franked final dividend of AUD 0.20 per share, bringing the FY26 total to AUD 0.34. Metals results remain sensitive to scrap availability, selling prices, ferrous steel demand, tariffs and currency translation. SLS is also exposed to secondary-market equipment prices and customer project schedules.

Risks to Consider

Sims Limited (ASX:SGM) faces volatility in ferrous and non-ferrous scrap prices, changes in customer demand, operating costs and working capital requirements. Chinese steel exports can pressure ferrous markets, particularly in ANZ. SLS revenue and margins can vary with memory resale prices and the timing of hyperscale data centre decommissioning. Facility expansions, acquisitions and recycling equipment upgrades also involve execution and capital allocation risks. International earnings introduce foreign exchange and tax considerations.

What to Watch Next

At the FY26 results release, Sims forecast SLS underlying EBIT of AUD 75 million to AUD 90 million for H1 FY27, while noting variability in equipment decommissioning timing. Relevant developments for Sims Limited (ASX:SGM) include subsequent SLS processing volumes, North American trading margins, the contribution from Tri Coastal Trading and progress on ANZ metal recovery projects. Steelmaking capacity and scrap demand trends in the United States and ANZ are further operating indicators. The annual general meeting is scheduled for 20 November 2026.

Key Insights

FY26 results reflected an increase in underlying group earnings, with higher contributions from North American recycling, SA Recycling and SLS. ANZ ferrous margins remained a counterweight. Sims Limited (ASX:SGM) ended FY26 with higher operating cash inflow and moderately higher net debt. Its next reporting periods will help establish whether SLS earnings, acquisition integration and metals trading margins develop in line with the operating conditions described by management.

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