Amey loses €12m through EfW activities in 2021

Amey’s profits before tax in the first half of 2021 were four times higher than at the same time last year, though the company lost €12 million (£10.21 million) through its energy from waste (EfW) activities.

Since 2003, infrastructure services provider Amey has been a subsidiary of Spanish company Ferrovial.

Aerial image of the Milton Keynes Waste Recovery Park

Amey treats waste at four sites across North Yorkshire, Milton Keynes, Cambridgeshire and the Isle of Wight. Treatment includes mechanical biological treatment, “traditional” mass-burn EfW, in-vessel composting, advanced thermal treatment and anaerobic digestion.

Ferrovial revealed its results in a half-year update published on 27 July. The services arm’s earnings before interest, taxes, depreciation, and amortisation stood at €72 million for the first half of 2021, compared with €17 million between January and June 2020.

Revenue was up to €1.46 billion, compared with €1.25 billion for the same period in 2020. The firm attributed the increase to new contracts for maintenance work with the Ministry of Defence, alongside work in the rail and road sectors.

Services

Ferrovial classified all its services activities as “discontinued operations” as of 31 December 2018. This means the company is looking to divest or shut down all its services activities.

The entrance to Amey’s 44,000 tonnes per year capacity EfW facility on Forest Road, Newport, Isle of Wight (picture: Darren Toogood)

However, in its update the company said its waste treatment business in the UK had been reclassified as a “continuing activity”.

While Ferrovial says it will “continue with its divestment process in the future”, the company believes it is “foreseeable” that the process will take longer than 12 months, with one plant, believed to be the EfW facility on the Isle of Wight, reaching construction end and others “increasing availability”.

In 2020 the company’s waste treatment division’s revenues were £84.1 million, down from £93.2 million in 2019 (see letsrecycle.com story). The division’s operating losses were £83.8 million, up from £69.1 million in 2019. Amey says it incurred ‘exceptional costs’ of £39.8 million and £9.8 million due to contract loss provisions on its respective contracts with Milton Keynes and the Isle of Wight.

Amey also exited several waste contracts in the UK, with Urbaser acquiring six of them in January 2021 (see letsrecycle.com story).

Spain and Portugal

Meanwhile, Ferrovial also announced on 27 July that it had sold its environmental services business in Spain and Portugal to PreZero for €1.13 billion.

PreZero has acquired Ferrovial’s environmental services business in Spain and Portugal for €1.13 billion (picture: Ferrovial)

The transaction involves the sale of Ferrovial’s environmental services, waste collection, waste treatment, and recycling businesses in the Iberian Peninsula.

Thomas Kyriakis, PreZero’s chief executive, said: “The planned acquisition is the next step in PreZero’s expansion, with which we intend to further expand our activities in southern Europe. Ferrovial is excellently established in the field of environmental management and ideally complements PreZero’s portfolio. In the process, we anticipate valuable synergies and an additional starting point for the further development of the circular economy in Europe.”

Ferrovial’s CEO Ignacio Madridejos said he was “very pleased” to leave the services business in Spain and Portugal in the hands of PreZero.

PreZero is the environmental services division of European retail giant Schwarz Group, which owns the Lidl and Kaufland brands. PreZero provides waste disposal, sorting, processing and recycling services and has operations in Europe and the US, employing 13,000 people across more than 280 locations.

In December 2020, PreZero acquired the recycling and recovery operations of Suez in Sweden for SEK 3.7 billion (£322 million) (see letsrecycle.com story).

When asked if PreZero had any interest in the UK market, a company spokesperson appeared noncommittal but did not dismiss the idea. They told letsrecycle.com: “PreZero intends to continue growing organically and inorganically in the future. The focus is generally on Europe.”

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