Renewi sees full-year results 'significantly above' previous expectations

Waste-to-product business Renewi said on Monday that results for the year are expected to be “significantly above” its previous expectations following a particularly strong performance in September.

In a trading update for the year to 31 March 2018, the company said the commercial division performed particularly well, with increased waste volumes driven by improving economic growth and construction market recovery. Meanwhile, income from the recyclate division remained strong throughout the period and the monostreams business delivered a positive performance.

Renewi said the strong outperformance of the commercial division and monostreams has more than offset the previously reported challenges at ATM in the hazardous waste division and the municipal canadian business.

In addition, it said that merger benefits, including cost synergies, margin benefits from internalised waste treatment and purchase price accounting adjustments have been better in the first half than management's original expectations. Reported earnings in the first half have also benefited from the relative weakness of the pound against the euro compared with the company’s budgeted rate of 1.20.

“Against this positive operating background and in preparation for the forthcoming interim results, the board has reviewed the Group's trading momentum and prospects for the full year and now expects the group to deliver a result for the year ending 31 March 2018 which is significantly above its previous expectations.

“The board expects the group's profits to be more strongly weighted towards the first half than usual because of the favourable market conditions in the seasonal construction market together with the outlook for moderating recyclate prices in the second half and reduced soil treatment volumes.”

Renewi added that at this early stage its expectations for the year ending 31 March 2019 remain unchanged.