Pennon expects EfW boost for Viridor earnings

Pennon Group, the parent company of UK waste management firm Viridor, has sought to reassure investors over the firms performance, as a decline in landfill revenues has continued to affect the business.

In an interim management statement, published this morning (August 13) Pennon also said that profitability of its recycling operations had been moderately affected by weakness in the value of recyclable material during the first half of the 2014/15 financial year.

However Pennon has claimed that the company is performing in line with expectations for the year and it expects that earnings will be buoyed by five energy-from-waste facilities due to come online during the second half of the year, despite earnings for the first half of the year being materially lower than those seen in 2013/14.

In its statement, Pennon said: Viridor continues its transformation from being predominantly a landfill operator to being one of the country’s leading recycling, renewable energy and waste management companies.

It continued: Year to date performance has primarily been impacted by the expected continuation of the decline of the landfill business. Also, as expected, landfill gas generation has declined from peak and the recycling business has been moderately affected by near term weakness in recycling prices.

Pipeline

Energy from waste projects currently in development include plants at Runcorn, Exeter, and Cardiff, all of which have reached advanced stages of commissioning. The firm also announced this week that its 200 million EfW plant at Ardley had successfully exported its first energy to the National Grid (see letsrecycle.com story). Progress on the construction of plants at Glasgow and Peterborough has also been made.

Once these plants have been completed, Viridor expects to have as much as 15% of the share of the energy from waste market in the UK by 2020. The company has said that it now has in excess of 85% of the waste needed to supply the facilities.

The company has also revealed that its 12.5 million plastics sorting plant at Rochester is due to come online within the coming weeks (see letsrecycle.com story), while its 25 million glass recycling plant in Newhouse, Lanarkshire will follow shortly thereafter (see letsrecycle.com story).

During the full 2013/14 financial year, Viridor saw its profits before tax and exceptional charges decrease by 6.7 million (19.5%) to 27.6 million (see letsrecycle.com story).