Key Highlights

• All figures below are from the company's FY26 announcement and are in Australian dollars.

• Underlying net profit after tax was A$289.1 million, against A$83.1 million in FY25.

• Statutory net profit was A$245.3 million, compared with A$2.4 million.

• Underlying Diluted Earnings per Share were 147.7 cents.

Why has a metal recycler become part of the artificial intelligence conversation? Because Sims Limited (ASX:SGM) now earns a large share of its profit from recovering and reselling components from decommissioned data centres, alongside its traditional scrap business. That shift helped underlying earnings before interest and tax (EBIT) reach A$468.0 million in the year to 30 June 2026, up from A$174.9 million a year earlier, according to the company's results announcement of 18 August 2026.

What Sims does and how it earns money

Sims buys, processes and sells recycled metal, and runs a technology recycling arm. Revenue comes from several places.

North America Metal collects and processes ferrous and non-ferrous scrap. Sims also has an interest in SA Recycling, a US joint venture whose earnings are reported as a contribution rather than as consolidated revenue. Australia and New Zealand (ANZ) supplies scrap to steelmakers and exports. Sims Lifecycle Services (SLS) retires, resells and harvests parts from data centre equipment.

Metals earnings depend heavily on Commodity prices and on the spread between what Sims pays for scrap and what it can sell it for. Volumes, freight and operating costs matter too.

The FY26 results in numbers

All figures below are from the company's FY26 announcement and are in Australian dollars.

Sales revenue rose 6.9% to A$8,007.5 million. Underlying net profit after tax was A$289.1 million, against A$83.1 million in FY25. Statutory net profit was A$245.3 million, compared with A$2.4 million. Underlying diluted earnings per share were 147.7 cents.

Return on invested Capital improved to 11.7%. The total Dividend was 34.0 cents per share, including a fully franked final dividend of 20.0 cents, with a Record Date of 1 October 2026 and payment on 15 October 2026. Sims said franking Credit availability on future dividends is expected to fall below 50%.

Operating cash inflow was A$423.6 million. Net Debt at 30 June 2026 was A$358.3 million, compared with A$332.3 million a year earlier. Acquisitions totalled A$97.5 million, including A$94.8 million for Tri Coastal Trading.

The result also finished above the guidance range of A$420 million to A$435 million that Sims issued on 17 June 2026, which had itself lifted an earlier range of A$350 million to A$400 million.

Where the profit came from

SLS was the standout. Its underlying EBIT rose to A$172.7 million from A$32.6 million, on sales revenue of A$757.0 million, up 77.4%. Processed repurposed units rose 90.9% to 16.8 million. Coverage of the results attributes the jump to Demand for recovered memory components linked to AI infrastructure, and the company describes SLS as "an important part of the Sims Investment case".

North America Metal lifted underlying EBIT to A$135.9 million from A$80.1 million. SA Recycling contributed A$235.5 million, almost double the prior year. Management points to more encouraging non-ferrous prices and domestic US steel demand.

ANZ moved the other way. Underlying EBIT fell to A$55.8 million from A$72.2 million, even though revenue rose 12.7% to A$1,776.0 million.

Sector conditions and competition

Scrap recyclers compete on collection networks, processing scale and relationships with steel mills and traders. Sims is among the larger names in North America and Australasia, but it is a price-taker in global commodity markets, and rivals and regional players can influence local scrap prices.

In its outlook, the company said the non-ferrous conditions that supported FY26 are expected to stay supportive in FY27. It expects US tariffs and new electric arc furnace capacity to support North American ferrous scrap demand.

In ANZ, it expects elevated Chinese steel exports to keep pressuring ferrous markets. It sees domestic demand in Australia and New Zealand rising over the medium term as new electric arc furnaces come online. That is an expectation, not an outcome.

The data centre side is a different market. Competition there includes other IT asset disposition and equipment recovery specialists, and Sims is relatively new to being valued for it.

Guidance and what to watch

The only quantified FY27 guidance in the announcement concerns SLS. Sims expects first-half FY27 underlying EBIT of A$75 million to A$90 million. For context, SLS earned A$172.7 million across the whole of FY26, so the guided range implies a lower run-rate than the year just reported, though first-half and full-year figures are not directly comparable. The company gave no group-level FY27 EBIT figure.

Upcoming events may include the Annual General Meeting and any trading commentary alongside it. The first-half FY27 result will be the next full test of the guidance.

Material risks and uncertainties

Commodity exposure is the central risk. Non-ferrous prices helped FY26, and a Reversal would affect North America and SA Recycling earnings. Weak ferrous markets in ANZ show how quickly conditions can turn.

SLS earnings depend on the timing of customer decommissioning programmes. Sims itself notes that this timing is variable, and it can shift profit between reporting periods. A slowdown in data centre build-outs or changes in memory pricing could also affect it, although neither is predicted in the company's outlook.

Other considerations include higher net interest costs, which rose A$10.7 million to A$44.4 million, the integration of acquisitions such as Tri Coastal Trading, and exchange-rate movements. Constant-currency revenue growth was 10.9%, well above the reported 6.9%, which shows how currency can mask underlying activity for a company with large US operations.