Weekly News Bulletin: Aug. 5-11, 2021


Republic Beats Q2 Expectations on Higher Pricing and Volume

Republic Services (RSG)
  Three Months Ended June, 30
(millions of $) 2021 2020
Revenue $2,812.8 $2,454.4
EBITDA $829.2 $675.9
EBITDA Margin 29.5% 27.5%
Net Income $331.1 $225.5

Republic Services (Phoenix, AZ) posted stronger-than-expected second quarter results buoyed by both volume and pricing growth. Commercial collection volumes were up over 8 percent and disposal volumes were up 5.3 percent for MSW and 8.6 percent for C&D wastes as the economy continued to recover from the pandemic. Core pricing increased revenue by 5.2 percent. Meanwhile, the company's average recycled commodity price per ton sold during the second quarter was $170, up by $37 per ton from the first quarter and by $69 per ton compared with last year. "Second quarter results reflect even further acceleration in our business, which is a direct outcome of continued progress on our strategic priorities," said Jon Vander Ark, president and CEO. Republic continued to convert CPI-based contracts to more favorable pricing mechanisms and now has approximately $950 million in annual revenue tied to the water-sewer-trash index or a fixed-rate increase of 3 percent or greater. Based on its recent performance, the company raised its full-year adjusted diluted EPS guidance to $4.00 to $4.05 and its full-year adjusted free cash flow guidance to $1,450 million to $1,475 million...Read More »



Waste Connections Q2 Revenue up 17.5% Beats Expectations

Waste Connections, Inc. (WCN)
  Three Months Ended June 30
(millions of $) 2021 2020
Revenue $1,533.9 $1,305.7
EBITDA $484.9 $394.3
EBITDA Margin 31.6% 30.2%
Net Income $177.0 ($227.1)

Waste Connections, Inc. (Toronto, ON) reported better-than-expected second quarter revenue and earnings helped by higher solid waste pricing and volumes, higher recovered commodity values, and recent acquisitions. Pricing and volumes grew by 11.4 percent in the quarter that helped revenue grow by 17.5 percent. EBITDA was up 23 percent as cost saving measures deployed during the pandemic bore fruit. Recent acquisitions have also contributed. "Year to date, we have signed or closed 14 acquisitions with total annualized revenue of approximately $115 million, including $75 million of franchise operations in California, Nevada and Oregon expected to close later this year," said President and CEO Worthing Jackman. Consequently, the company revised its outlook for the year and now expects to generate revenue of about $5.975 billion (up from a previous estimate of $5.8 billion) and net income of about $690 million. The company also plans bigger capital expenditures, now estimated at about $675 million, up from its original estimate of $625 million.



GFL Environmental Q2 Revenue Up 32.2% on Higher Volume and Pricing

GFL Environmental Inc. (GFL)
  Three Months Ended June 30
(millions of $) 2021 2020
Revenue $1,314.3 $993.3
EBITDA $353.0 $261.5
EBITDA Margin 26.8% 26.3%
Net Income $25.2 $(115.5)

GFL Environmental Inc. (Vaughan, ON) reported better-than-expected second quarter results as revenue increased 32.3 percent to $1.314 billion driven by improved pricing ahead of plan at 4.1%, volume improvement and outperformance from acquisitions completed in 2020. Solid waste volumes were up 6.3 percent across all collection and post collection operations. The company closed nine accretive tuck-in acquisitions during the quarter, received approximately $60 million from the sale of non-core assets, and made substantial progress in closing its recent acquisition of Terrapure Environmental Ltd. The company recently formed a new unit called GFL Renewables that will develop renewable natural gas (RNG) from at least 18 of its landfills that could ultimately yield $175 million worth of gas to be sold from new or upgraded projects at these sites. Based on the strength of its recent performance, the company revised upward its revenue guidance for the year to between $5.225 billion and $5.275 billion...Read More »



Pratt Industries to Build $400 Million Recycled Paper Mill in KY

Pratt Industries plans to build a $400 million recycled paper mill in Kentucky. Actually, the plan is to build two plants, a state-of-the-art 450,000-square-foot paper mill that will manufacture 100% recycled products and later, a 700,000-square-foot corrugator plant to produce corrugated sheets and boxes, including pizza boxes and packaging for major distributors and big box stores, using paper sourced from the new paper mill. The project constitutes Pratt's sixth 100% recycled paper mill. It follows the opening an Ohio mill in 2019, and a $260 million mill in Indiana in 2016. The company boasts that it currently recycles more than 2 million tons of fiber every year...Read More »



Founder of Electric Truck Maker Nikola Charged with Securities Fraud

Less than a year after Republic Services "discontinued" its order with Nikola for 2,500 electric collection vehicles, Nikola's founder, Trevor Milton, was indicted on securities-fraud charges for allegedly lying to investors about its business making commercial trucks powered by alternative fuel.

Milton resigned last September amid an SEC investigation stemming from allegations of fraud by short-seller Hindenburg Research. Milton and the company disputed many of the claims but admitted to staging a video showing a truck that appeared to be functional that in fact was not. According to the indictment, Milton also lied about reservations for future delivery of the semi-trucks, saying they were binding orders that represented billions in revenue while, most of the orders could be canceled at any time...Read More »



Casella Reports 14.4% Q2 Revenue Growth, Operational Improvements

Casella Waste Systems (CWST)
  Three Months Ended June 30
(millions of $) 2021 2020
Revenue $215.9 $188.8
EBITDA $52.1 $43.9
EBITDA Margin 24.1% 23.3%
Net Income $11.8 $12.1

Casella Waste Systems, Inc. (Rutland, VT) reported Q2 revenues that were up 14.4 percent as the company bounced back from the pandemic of last year and was "executing very well against our key strategies," said to John W. Casella, Chairman and CEO. Both collection pricing and landfill pricing were up over 4 percent while volumes were up over 7 percent from the same period last year. While the industry battles labor shortages, Casella took the opportunity to highlight ongoing efforts to improve company culture, safety through automation of trucks and routes, and employee retention from improved worker morale. Based on its strong performance, Casella revised upwards its 2021 guidance to include revenue of between $850 million and $860 million (as compared to $815 million to $830 million), and net income of between $35 million and $39 million (as compared to $33 million to $37 million). Last week the company made a big push into the Connecticut market by buying Willimantic Waste Paper Co., Inc. which brings with it annualized revenues of approximately $62 million...Read More »



Covanta Reports 11% Higher Q2 Revenue

Covanta Holding Corporation (CVA)
  Three Months Ended June 30
(millions of $) 2021 2020
Revenue $506 $454
EBITDA $110 $96
EBITDA Margin 21.7% 21.1%
Net Income $(19) $(13)

Covanta Holding Corporation (Morristown, NJ) second quarter revenue grew by 11 percent showing strong improvement across all lines of business. Tip fees at plants were up 7 percent, service fees were also up 7 percent on higher volumes, energy revenue grew by 10 percent on higher pricing and volume and aided by renewable energy credits, and materials processing and recycling revenue was up, especially from the company's environmental services business. Sales of metals increased by $18 million from both higher market prices and higher sales volume. Second quarter earnings results were released just two weeks after the announcement that global investment organization EQT group acquired the waste-to-energy company for $5.3 billion...Read More »



Battery Recycler Redwood Raises $700 Million Amid Shift to Electric Vehicles

Battery-recycling company Redwood Materials Inc. (Carson City, NV) has raised over $700 million in new funding to expand its footprint in its home state and establish new facilities elsewhere in North America and in Europe. The company was founded in 2017 to capitalize on the growing adoption of electric vehicles and the batteries that power them. The company recycles items ranging from discarded personal electronics to scrap produced when battery cells are manufactured, extracting material such as lithium, cobalt and nickel that are essential to the manufacture of new lithium-ion batteries. Battery electric vehicles and plug-in hybrids are expected to make up around 17 percent of new-car sales in 2030, up from less than 5 percent in 2020, according to the International Energy Agency. "The need for these materials will grow exponentially over time as we enter the era of decarbonization," said Joe Fath, a portfolio manager for T. Rowe Price which led the latest round of funding. Redwood Materials CEO is JB Straubel who was Tesla's chief technology officer until 2019...Read More »


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