Suez reveals 2008 growth for SITA UK

The financial statement for 2008, which was published today (January 29), showed that, taken together, its UK and Scandinavian waste sectors showed growth of 4.2%, equivalent to an increase of €51 million (£46.7million).

Suez said that sales in all its SITA UK business segments rose due to the price increases in collection and treatment, driven by the Landfill Tax escalator, which increased from £24 to £32 per tonne in April 2008.

However, the French utilities company revealed that the drop in commodity prices affected UK volumes of recycled waste in the last quarter of 2008.

And, due to the weakness of the pound, the actual contribution of the UK sector of the company to Suez Environnement fell by -4.9%, which is the equivalent to €60 million (£55.1 million).

Global

While the statement showed that, in global terms, Suez had achieved overall revenue of €12,364 million (£11,342 million) for the year, equal to a 5.4% increase compared to figures published in December 2007, the company acknowledged the impact of the market slowdown on its operations.

It said: “In the 4th quarter, in a degraded macroeconomic context, organic growth stood at 2.4% due primarily to the drop in the waste volumes from industrial and commercial clients and lower recycling activity.”

As a result of the economic situation, Suez outlined changes to its short-term priorities, with an emphasis on measures including giving priority to “profitable and cash-generative” organic growth in the company, and a temporary slowdown in its capital expenditure on development.

Growth

Paris-based Suez operates as a utility company with interests in both the water and waste management sectors, and currently operates 47 incineration facilities worldwide, 46 of which are energy recovery.

The company explained that its ‘Waste Europe' division accounted for €151 million (£138.6 million) of overall growth for the year through increased sorting and recycling activities in France and the UK and incineration in Belgium.

In addition, the company reported that it had spent €81 million (£74.3 million) on ‘tuck-in acquisitions' – purchases made for the sole purpose of merging – in the disposal sector and €2 million (£1.83 million) on the same in the ‘Waste Europe' division.

The 2008 results are currently being audited and will be approved by the Board of Directors on March 3 2009.