Covanta: „Our core EfW business is running very well“

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Source: Covanta Holding Corporation

Morristown, New Jersey, USA — For the twelve months ended December 31, 2015, total revenue of Covanta Holding Corporation decreased by $37 million to $1.65 billion from $1.68 billion in 2014. Decreases in energy, recycled metals and construction revenue at the leader in sustainable waste and energy solutions were partially offset by new waste and service revenue.

„We’ve taken several important steps forward since our last earnings call: We moved the Durham-York EfW project into commercial operations, made continued progress on a number of fronts in our strategic plan, and took advantage of the volatile market conditions to repurchase $50 million of stock,“ said Stephen J. Jones, Covanta’s CEO. „Our Dublin facility is now more than halfway through construction and, operationally, our core EfW business is running very well. While we face continued weakness in the commodities markets, our long-term outlook for growing Free Cash Flow remains strong.“

Same store North America EfW revenue decreased by $47 million as follows:

  • waste and service revenue increased by $13 million;
  • energy revenue decreased by $25 million, primarily driven by lower energy pricing; and
  • recycled metals revenue decreased by $35 million, driven by a decline in recycled metal market pricing.

Also within North America EfW revenue, contract transitions, including lower debt service revenue, resulted in a decrease of $14 million. Transactions, primarily related to the Pinellas EfW operating contract, increased revenue by $7 million.

All other revenue (non-EfW operations) increased by $16 million on a consolidated basis. Waste and service revenue from non-EfW operations increased by $80 million, primarily due to the start-up of the New York City MTS contract and contribution from newly acquired environmental services businesses, while energy revenue from non-EfW operations decreased by $28 million, driven primarily by economically dispatching a biomass facility and lower market pricing. Other operating revenue decreased by $38 million, primarily due to lower construction revenue.

Excluding net write-offs, operating expense increased by $28 million to $1.5 billion. The year-over-year increase was primarily due to:

  • a $41 million increase in North America EfW plant operating expense due primarily to additional expense of $31 million related to the adoption of the service concession arrangement accounting guidance, as well as an $8 million increase due to contract transitions and a $7 million increase due to transactions partially offset by a $6 million decrease in same store plant operating expense;
  • a $33 million increase in North America segment non-EfW plant operating expense, primarily related to newly acquired Environmental Solutions businesses, the start-up of the New York City MTS contract and additional costs related to transfer stations, partially offset by lower incentive compensation and economically dispatching a biomass facility;
  • a $28 million decrease in other operating expense incurred due to lower construction expense and the sale of our insurance business at the end of 2014; and
  • a $17 million decrease related to depreciation and amortization expense Prozentand general and administrative expense.

The full report can be found under covanta.com.

Source: Covanta Holding Corporation / PRNewswire