Sims Metal Management Advises Inventory Adjustments Related to UK Operations

1/20/2013 6:41 PM EST

Sims Metal Management
Press release

Sims Metal Management Advises Inventory Adjustments Related to UK Operations

SYDNEY, Australia and NEW YORK, 2013-01-21 00:41 CET (GLOBE NEWSWIRE) -- Sims
Metal Management Limited (the "Company") (ASX:SGM) (NYSE:SMS) advises the
market that it has identified that the carrying value of inventory in its UK
business is materially overstated. The inventory in question is predominately
associated with the Company's Recycling Solutions business at Long Marston and
Newport. Based on information received by Senior Management and the Board, the
Company currently believes the inventory adjustment to be circa $60 million and
relates to both changes in the assessment of the net realizable value of
certain stock and to book to physical adjustments. The preliminary findings
indicate the situation has arisen in the context of control failures and
potential fraudulent conduct by local and regional plant management responsible
for technology and downstream processing systems in the UK. 

A Special Committee (the "Committee") of the Board has been formed to take
responsibility for the investigation that is in progress. The Committee is
headed by Chairman Geoff Brunsdon and includes Gerald Morris, Jim Thompson,
Heather Ridout and John DiLacqua. As well as Group CEO Daniel Dienst and Group
CFO Rob Larry, the Committee is working closely with the Company's external
auditor PricewaterhouseCoopers ("PwC"), and its legal counsel Baker & McKenzie. 

The detailed investigation is being performed by the Company's Group internal
audit team in conjunction with PwC reporting to the Committee. The immediate
priority of the Committee is to determine the amount of the adjustment and
impact on the Company's accounts. The Committee will also be responsible for
understanding where the breakdowns in the Company's control environment
occurred, what initiatives will need to be taken to improve those controls, as
well as overseeing the implementation of the recommendations it makes. The
Committee will also determine what action will be taken in relation to any
employees or third parties determined to be responsible. The Committee will
have access to whatever external support it requires. 

Independent of the inventory valuation issue, the Company also advises that it
has determined there is a triggering event under AASB 136 (Impairment of
Assets) at 31 December 2012 and that it expects there will be recognition of
goodwill impairment in the first half results. 

The Company expects to provide further information in relation to the inventory
adjustment and potential goodwill impairment in conjunction with the release of
its half year results. 

Cautionary Statements Regarding Forward-Looking Information

This release may contain forward-looking statements, including statements about
Sims Metal Management's financial condition, results of operations, earnings
outlook and prospects.Forward-looking statements are typically identified by
words such as "plan," "believe," "expect," "anticipate," "intend," "outlook,"
"estimate," "forecast," "project" and other similar words and expressions. 

These forward-looking statements involve certain risks and uncertainties. Our
ability to predict results or the actual effects of our plans and strategies is
subject to inherent uncertainty. Factors that may cause actual results or
earnings to differ materially from these forward-looking statements include
those discussed and identified in filings we make with the Australian
Securities Exchange and the United States Securities and Exchange Commission
("SEC"), including the risk factors described in the Company's Annual Report on
Form 20-F, which we filed with the SEC on 12 October 2012. 

Because these forward-looking statements are subject to assumptions and
uncertainties, actual results may differ materially from those expressed or
implied by these forward-looking statements. You are cautioned not to place
undue reliance on these statements, which speak only as of the date of this
release. 

All subsequent written and oral forward-looking statements concerning the
matters addressed in this release and attributable to us or any person acting
on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this release. Except to the extent
required by applicable law or regulation, we undertake no obligation to update
these forward-looking statements to reflect events or circumstances after the
date of this release. 

All references to currencies, unless otherwise stated, reflect measures in
Australian dollars. 

About Sims Metal Management

Sims Metal Management is the world's largest listed metal recycler with
approximately 270 facilities and 6,600 employees globally. Sims' core
businesses are metal recycling and electronics recycling. Sims Metal Management
generated approximately 88 percent of its revenue from operations in North
America, the United Kingdom, Continental Europe, New Zealand and Asia in Fiscal
2012. The Company's ordinary shares are listed on the Australian Securities
Exchange (ASX:SGM) and its ADRs are listed on the New York Stock Exchange
(NYSE:SMS). Please visit our website (www.simsmm.com) for more information on
the Company and recent developments. 

The Sims Metal Management logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=16674 


         Investor inquires contact
         Todd Scott
         Group Vice President - Investor Relations
         Tel: +61 4 0960 0352
         
         Media inquiries contact
         Daniel Strechay
         Group Director - Communications & Public Relations
         Tel: +1 212 500 7430