Renewi maintains expectations despite some lower volumes
By Josh White
Date: Monday 03 Oct 2022
(Sharecast News) - Waste-to-product technology company Renewi said in an update on Monday that it had traded "well" in the first half, with EBIT expected to be ahead of the prior year on flat revenues.
The London-listed firm said recyclate prices had remained above historic averages in the six months ended 30 September, although paper, plastic and metal prices reduced during the second quarter as anticipated.
It said it experienced lower volumes in some segments of its customer base in the commercial divisions, including construction and green waste, which it anticipated to continue during the second half.
Volumes across its other divisions remained "stable".
"With inflation increasing to low double digits in the main countries we operate in, for a significant part driven by energy prices, we continue to focus on cost control and passing on price increases to customers," the Renewi board said in its statement.
"The acquisition of Paro, an Amsterdam-based commercial waste and recycling business announced in May, completed on 1 August as expected and integration activities are underway."
The company said it expected core net debt as at 30 September to be around €390m, widening from €303m at the end of March, reflecting the €67m acquisition of Paro and ongoing innovation pipeline investments during the period.
Its leverage ratio, including the pro forma impact of Paro, was expected to be under 1.8x net debt-to-EBITDA at period end, compared to 1.4x in March.
"Whilst the group expects to deliver a strong performance for the first half, we are mindful of the continuing inflationary cost pressures, including energy, across the business and a challenging macroeconomic environment in the second half," the board said.
"Accordingly, our expectations for the full year remain unchanged.
"We remain confident of the medium- and long-term prospects as we see continued development of the circular economy and evolution of the market for low carbon secondary materials."
At 1141 BST, shares in Renewi were down 4.07% at 542p.
Reporting by Josh White at Sharecast.com.
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