Veolia reports 18.4% rise in profit in 2011

Alongside the financial report, the firm also published its second annual Go Further Together review on Tuesday (August 7) which gives an overview of Veolias performance throughout 2011, against a number of targets.

Looking at the Veolias financial performance for 2011, the financial report shows a 3.4% increase in turnover from continuing operations to 1,251 million from 1,210 million in 2010.

The firm said the increase was due to a range of factors, most notably the effects of its new integrated waste management facilities such as those is West Berkshire, South Downs and Southwark (see letsrecycle.com story) as well as the sale of some of its smaller depots.

The financial report states: The main factors affecting this are the effects of the increase in revenue in the integrated waste management contracts and the prior year operating profit derived from the Groups landfill business being adversely impacted by the need to provide for the accelerated closure of one of the landfill sites. There were no one off items of this nature during the current year.

In addition, during the year the Group sold some of its smaller depots at the year-end resulting in a significant gain of 6,825,000, along with other gains on the disposal of fixed assets.

Economy

While Veolias results have managed to defy the uncertain economic climate the firm said it had been impacted by fluctuations in the prices paid for recyclables. However Veolia said it had managed to offset the worst of this uncertainty through measures such as profit sharing.

The financial report states: The current economic circumstances have seen erratic demand for these products and global prices paid for recyclates have also been erratic but Veolia has managed to offset the worst of this uncertainty by leveraging Veolia SA Group relationships and by profit sharing arrangements with our customers.

Veolias directors said they were confident that the group will continue to deliver a strong financial performance in the coming year.

Breakdown

Veolia is the largest recycling and waste management firm in the UK. It provides services to commercial and industrial clients as well as local authorities.

Looking at a breakdown of the firms turnover by activities, the financial report shows that other waste management, which includes commercial and municipal contracts for the disposal of waste, accounts for the largest portion, with a turnover of 818.8 million. PFI style contracts saw an annual turnover for 2011 of 359.4 million while landfill operations accounted for 181.9 million.

However, despite having the largest annual turnover, Veolias other waste management activities brought in less profit than the PFI contracts, at 44,813,000 compared to 69,390,000. Landfill saw an annual operating profit of 25,582,000.

Achievements

Looking at other areas of its performance the Go Further Together report lists Veolias key achievements for 2011. These include:

• Winning a 14-year contract with the London Borough of Haringey for municipal waste collection, recycling and street cleansing;
• Volunteering over 11,000 hours of its employees time to local community projects;
• Improving its lost-time injury frequency rate yet again in 2011 a 73% improvement in performance on 2008 levels;

• Running 20 open days at its sites which saw more than 2,000 visitors learning about how it handles its waste and recycling; and,
• Being selected as preferred bidder by Leeds City Council for a Private Finance Initiative (PFI) contract for the treatment of residual waste (see letsrecycle.com story).

The Go Further Together project focuses on nine areas which act as a framework against which the firm can measure its communications and performance.