Renewi records €6.7m loss on UK contracts

However, the results, which cover April to September, show a reduction in losses when compared with the same period last year, during which time Renewi lost €7.9 million (£6.9 million) in the UK.

Renewi has six municipal contracts in the UK, with councils covering: Argyll and Bute; Barnsley, Doncaster and Rotherham; Cumbria;  East London; Elstow; and Wakefield.

While the wider Renewi group, which has operations across the Benelux region, recorded a before tax profit of €71.6 million in the same period, the UK municipal contracts remain “onerous”, the results say.

Renewi has considered its UK municipal contracts “onerous” for a number of years. The company recorded a €9.2 million loss (£7.9 million based on exchange rates at the time) on its UK municipal contracts in 2021/22, down from £16.5 million the previous year.

Renewi has set aside a further €8.9 million (£7.7 million) for the UK contracts for the next two years,  “given the current high inflationary environment.”

Renewi added: “All anticipated inflationary increases are not expected to be recovered by permitted contractual price increases resulting in an increase to the provision.”

Despite its losses in the UK, Renewi said in May 2022 that it sees room for expansion across the country (see letsrecycle.com story).

Figures

Despite the ongoing losses fin the UK market, Renewi has performed well on the wider scale.

Its revenue rose 4% to €952 million (£832 million), and its cent per share divided rose 17%.

Otto de Bont, Renewi’s chief executive, said: “We delivered a strong performance in the first half of FY23, ahead of our expectations. Our focus on pricing and cost control, together with high demand for recyclates, resulted in good profitability.

“While the board remains suitably cautious about the challenging macroeconomic outlook in the short term, we are confident the fundamentals of our business will allow us to grow in the medium and longer term.

“Waste volumes have historically been resilient through cycles and the ongoing transition to increased recycling, driven by legislation, societal pressure and innovation, will continue to support our business model.”