In spite of depressed resale prices in China, Sims Lifecycle Services reported a large increase in electronics resold during the 2023 fiscal year. | Andrii Yalanskyi/Shutterstock[/caption]
Low used electronics pricing in China, margin compression and inflation conspired to cut Sims Lifecycle Services' profits in half during the 2023 fiscal year, executives said.
Sims Lifecycle Services (SLS) brought in 325 million Australian dollars (about $211 million U.S.; all dollar amounts below in U.S.) in revenue during the 2023 fiscal year. That was down 0.5% from the previous year.
But earnings collapsed during this past fiscal year, which ended June 30, 2023. SLS' underlying earnings before interest and taxes (EBIT) were just over $5 million, down nearly 50% year over year, according to a company presentation.
SLS is the ITAD and data center decommissioning arm of metals giant Sims Limited. In disclosures and an Aug. 14 conference call with investors, executives at Sims Limited said SLS greatly boosted the number of electronics it resold last year, but prices that Chinese buyers were willing to pay remained lackluster.
"The reality is that the Chinese recovery is slow and China is currently the main driver of the price SLS receives for resold units," Stephen Mikkelsen, chief financial officer for Sims Limited, said during the Aug. 14 call. "A recovery is not likely to occur until the end of this calendar year or early calendar 2024."
In terms of the slightly lower revenue, SLS pointed to a decline in resale prices caused by China's renewed COVID-19 lockdowns, followed by a slow recovery in price, the presentation stated. In terms of the lower profits, SLS said it faced margin compression and inflationary pressures.
Despite the tough market conditions, SLS reported a large increase in the number of electronics it resold and redeployed during the fiscal year, "despite the impact of supply chain constraints and delayed refresh rates from hyperscalers," according to a press release. SLS repurposed 3.8 million units, up from 2.7 million during the prior year, or an increase of nearly 41%.
At the same time, SLS shrunk its workforce quite a bit last year. It averaged 726 employees, down 15% from the 2022 fiscal year.
[caption id="attachment_22695" align="aligncenter" width="1200"] In spite of depressed resale prices in China, Sims Lifecycle Services reported a large increase in electronics resold during the 2023 fiscal year. | Andrii Yalanskyi/Shutterstock[/caption]
Low used electronics pricing in China, margin compression and inflation conspired to cut Sims Lifecycle Services' profits in half during the 2023 fiscal year, executives said.
Sims Lifecycle Services (SLS) brought in 325 million Australian dollars (about $211 million U.S.; all dollar amounts below in U.S.) in revenue during the 2023 fiscal year. That was down 0.5% from the previous year.
But earnings collapsed during this past fiscal year, which ended June 30, 2023. SLS' underlying earnings before interest and taxes (EBIT) were just over $5 million, down nearly 50% year over year, according to a company presentation.
SLS is the ITAD and data center decommissioning arm of metals giant Sims Limited. In disclosures and an Aug. 14 conference call with investors, executives at Sims Limited said SLS greatly boosted the number of electronics it resold last year, but prices that Chinese buyers were willing to pay remained lackluster.
"The reality is that the Chinese recovery is slow and China is currently the main driver of the price SLS receives for resold units," Stephen Mikkelsen, chief financial officer for Sims Limited, said during the Aug. 14 call. "A recovery is not likely to occur until the end of this calendar year or early calendar 2024."
In terms of the slightly lower revenue, SLS pointed to a decline in resale prices caused by China's renewed COVID-19 lockdowns, followed by a slow recovery in price, the presentation stated. In terms of the lower profits, SLS said it faced margin compression and inflationary pressures.
Despite the tough market conditions, SLS reported a large increase in the number of electronics it resold and redeployed during the fiscal year, "despite the impact of supply chain constraints and delayed refresh rates from hyperscalers," according to a press release. SLS repurposed 3.8 million units, up from 2.7 million during the prior year, or an increase of nearly 41%.
At the same time, SLS shrunk its workforce quite a bit last year. It averaged 726 employees, down 15% from the 2022 fiscal year.
In spite of depressed resale prices in China, Sims Lifecycle Services reported a large increase in electronics resold during the 2023 fiscal year. | Andrii Yalanskyi/Shutterstock[/caption]
Low used electronics pricing in China, margin compression and inflation conspired to cut Sims Lifecycle Services' profits in half during the 2023 fiscal year, executives said.
Sims Lifecycle Services (SLS) brought in 325 million Australian dollars (about $211 million U.S.; all dollar amounts below in U.S.) in revenue during the 2023 fiscal year. That was down 0.5% from the previous year.
But earnings collapsed during this past fiscal year, which ended June 30, 2023. SLS' underlying earnings before interest and taxes (EBIT) were just over $5 million, down nearly 50% year over year, according to a company presentation.
SLS is the ITAD and data center decommissioning arm of metals giant Sims Limited. In disclosures and an Aug. 14 conference call with investors, executives at Sims Limited said SLS greatly boosted the number of electronics it resold last year, but prices that Chinese buyers were willing to pay remained lackluster.
"The reality is that the Chinese recovery is slow and China is currently the main driver of the price SLS receives for resold units," Stephen Mikkelsen, chief financial officer for Sims Limited, said during the Aug. 14 call. "A recovery is not likely to occur until the end of this calendar year or early calendar 2024."
In terms of the slightly lower revenue, SLS pointed to a decline in resale prices caused by China's renewed COVID-19 lockdowns, followed by a slow recovery in price, the presentation stated. In terms of the lower profits, SLS said it faced margin compression and inflationary pressures.
Despite the tough market conditions, SLS reported a large increase in the number of electronics it resold and redeployed during the fiscal year, "despite the impact of supply chain constraints and delayed refresh rates from hyperscalers," according to a press release. SLS repurposed 3.8 million units, up from 2.7 million during the prior year, or an increase of nearly 41%.
At the same time, SLS shrunk its workforce quite a bit last year. It averaged 726 employees, down 15% from the 2022 fiscal year.
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