Renewi says it is making “encouraging progress” at the market despite the coronavirus and anticipates increasing production progressively during the next financial year.
In a trading update for the year up to 31 March, published today (26 March), the European waste management company said its year-end core net debt was expected to be below €500m.
The trading update reads: “The board remains confident that Renewi will deliver full year results in line with its expectations.
“The Commercial Division has traded broadly as expected with other divisions in line or ahead of expectations.”
Renewi says it boosted its financial outlook with the development of its capacity to produce from thermally treated soil building materials.
However, the waste management company also says that, faced with coronavirus uncertainties and a potential resultant slowdown in the macro economy for the medium term, the board is adopting a prudent approach to planning and investment. It is to publish its full year results in June.
It had been reported in November 2019 that Renewi’s UK revenue had fallen in the preceding six months, with the company’s half year results warning of “potential future risks” from Brexit and the Dutch incinerator tax (see letsrecycle.com story).
Several industries, including those working with glass or biomass, anticipate a significant reduction in materials in the next few months due to measures put in place by the government to prevent the spread of the coronavirus (see letsrecycle.com story).
Renewi says the putting in place of significant government measures such as wage and VAT tax payment deferrals and additional support to maintain employment levels will have a positive impact in offsetting the financial impact of reduced volumes.
Though it says volumes have only just begun to reduce and there is expected to be little impact on its March results, the company does predict a negative impact on next year’s finances, the extent of which will depend on the duration and severity of government measures.
Therefore, the company has prepared cost reduction and cash preservation plans for progressive implementation, which include reductions in discretionary expenditure and capital expenditure, placing employees on temporary leave and not paying a final dividend for the current year.
It is anticipated these measures will save more than €40 million during the next financial year.
Meanwhile, waste management company Suez has moved to reassure the public that it is committed to maintaining services in the face of the virus.
Bertrand Camus, chief executive of Suez , said: “At the time the situation is improving in China, the covid-19 pandemic is spreading all over the world.
“The entire Suez Group is mobilized to keep operating its essential services in water and waste, which have a direct impact on health and quality of life of citizens.
“The board joins me to thank all the teams who are focused on a daily basis, with professionalism and calm to accomplish their mission and further the transformation of our Group.”
The company says that, while ensuring the safety of its employees, it has implemented the necessary continuity plans in solidarity with governments, public sector and private sector clients, who have in turn been quick to set up support measures to help us deliver these vital services.