Europe’s largest recycling company Renewi (RWI) delivered another strong quarter for the three months to December and announced a further ‘material upgrade’ to its outlook for the full year to March.
The waste-to-product firm has been on a charge over the last year with its shares rallying from below 400p to over 800p in November before falling back in line with the market. Today’s update saw the stock add 7p or 1.1% to 664p.
FROM STRENGTH TO STRENGTH
The Commercial Waste division covers the Netherlands and Belgium, where it is the market leader in the collection, sorting, treatment and recycling of waste materials.
Recyclate prices have ‘consistently traded at high levels compared to the prior year’, more than offsetting lower volumes, thanks to high prices for raw commodities and increased demand for secondary materials.
The Mineralz & Water division processes soil and water contaminated with minerals and turns the soil into secondary materials while the recovered minerals are re-marketed. Again, higher prices have offset lower volumes as the market recovers.
RAISING GUIDANCE
Due to strong trading through the third quarter and expectations of continued high prices for recyclates this quarter the firm has raised its forecast for underling EBIT (earnings before interest and taxes) to €120 million.
That compares with €73 million of EBIT last year and consensus forecasts of just under €90 million for the current year.
The firm is confident in the medium term thanks to its innovation pipeline, which it says is on track to deliver ‘significant additional earnings’ over the next three years and beyond, as well as its digitization programme which will lower costs.
