Pressures in the paper market spread to Veolia this week as it announced that a fall in waste paper prices across the world led to a €64M (£57 million) hit on its revenue, particularly on the Continent in Germany and France.
Veolia suffered particularly in France and Germany from the downturn in waste paper prices
In the UK the reductions were “off-set by higher non-ferrous metal prices”, and overall revenue grew by 4.4% in UK and Ireland to €1.08bn (£965m) compared to the first half of 2017.
This was put down to “good private finance initiative (PFI) availability, an increase in electricity tariffs and industrial service contract wins.
Across the business, revenue grew by more than 10% compared to the same period last year.
The report said: “Group consolidated revenue was €12,565 million during the first half of 2018 compared to represented €12,187 million in H1 [the first half of] 2017, up 6.0% at constant exchange rates (+3.1% at current rates) and +4.1% at constant scope and exchange rates.”
Recyclate prices
Across the entire company, despite the fall in paper prices as a result of restrictions into China, Veolia said that Energy and recyclate prices had a positive impact of €37 million on its overall revenue, with an increase in energy prices of €83 million.
In the UK, along with Latin America, France and Asia, “higher waste volumes” contributed to an increase of over €225 million.
Elsewhere, Veolia also reported a “sold growth” of EBITDA – earnings before interest, taxes, depreciation and amortization – in the United Kingdom, thanks to an “improved availability of incineration plants and efficiency gains” while adding that “lower recycled paper prices were offset by higher non-ferrous metal prices”.
However in its overall business, energy and recyclate prices had a negative impact on EBITDA (-€42 million), with the significant increase in fuel prices and price cost squeeze in Central Europe (-€20 million), increase of fuel prices in waste (-€10 million) and negative impact of paper prices (-€12 million ) partially offset by sulphuric acid recovery prices in the United States.
Precise details about the UK performance on paper were not given by Veolia, but the company did say that the negative impact of paper prices came “mainly from France and Germany”, with the suggestion that the UK performed better.
Veolia chief executive Antoine Frérot said he was pleased with the overall growth of the business
Veolia response
Commenting on the release, Antoine Frérot, Veolia’s chairman and CEO, said she was pleased so see growth across the business.
“The first half of 2018 finished once again in a rhythm of sustained growth of both activity and results,” she explained.
Ms Frérot added: “The commercial momentum that began two years ago continues. Revenue benefited from the additional efforts we engaged in 2017, growing 6%, along with a notable increase of 4% in waste volumes.
“The results also revealed sustained growth, with EBITDA up 5.8% and current net income group share excluding capital gains up 13%, thanks to the revenue growth and the cost savings achieved during the first semester.”
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Source: letsrecycle.com Waste Managment
