Renewi (RWI) can't seem to catch a break. Not only have lower recyclate prices and reduced incinerator capacity eaten into margins during the first-half, but regulators have requested further tests of soil treated at its ATM soil and waste water treatment facility. That means the facility will run at around 30 per cent capacity until the situation is resolved, wiping out around €3m (£2.6m) in operating profits every month. Reduced output at the Netherlands-based plant meant underlying operating profits for the hazardous waste division were down almost two-thirds to €5.9m.
The core commercial waste business reported a marginal reduction in underlying operating profits, as lower recyclate prices and increased disposal costs eroded margins. With capacity at European incinerators maxed out, outgoing chief executive Peter Dilnot says an increase in the price paid by companies to Renewi to dispose of waste should mitigate some of the impact of lower recyclate rates.
Analysts at house broker Peel Hunt downgraded their pre-tax profit and EPS forecasts for the year to March 2019 to £62.6m and 5.8p, respectively, from £81.8m and 7.7p.
| RENEWI (RWI) | ||||
| ORD PRICE: | 49.35p | MARKET VALUE: | £395m | |
| TOUCH: | 49.2-49.35p | 12-MONTH HIGH: | 109p | LOW: 45p |
| DIVIDEND YIELD: | 6.3% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 55p* | NET DEBT: | 111% | |
| Half-year to 30 Sep | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
| 2017 | 890 | 25.3 | 2.2 | 0.95 |
| 2018 | 900 | 23.5 | 2.5 | 0.95 |
| % change | +1 | -7 | +14 | - |
| Ex-div: | 29 Nov | |||
| Payment: | 4 Jan | |||
| £1=€1.15 *Includes intangible assets of €681m, or 85¢ a share | ||||
