Veolia reports slight uptick in waste management revenues

Antoine Frérot, CEO of Veolia
Veolia's CEO Antoine Frérot reported "solid growth"
for the group in January and February.
07.05.2020 − 

The waste division of French environmental services group Veolia generated worldwide revenues of €2.47bn in the first quarter of 2020. This is a slight increase of 0.6 per cent. At constant currency and scope of consolidation, sales were up only 0.2 per cent, according to the company's first quarter earnings report which was published this week.

Group CEO Antoine Frérot reported that the financial year had started well in January and February, with "continued solid growth in line with previous years". According to the company, the impact of the Coronavirus epidemic was still limited in the first quarter, but was already reflected in declining sales and earnings. Consolidated sales fell by around 2 per cent to €6.6bn, and current net income net of capital gains by 38 per cent to €117m.

Substantially higher cost-cutting

In an effort to offset the financial impact of the crisis, Veolia has raised its concern-wide cost-cutting target for the year by €200m. The group’s existing cost reduction programme already included an objective of €250m for 2020. Veolia also now plans to reduce capital expenditure this year by €500m. The remaining €2bn in capex is to be used for growth projects.

On its home market of France, Veolia’s waste activities generated €608m in revenue in the first quarter, 4 per cent less than in the comparison period last year. The concern attributed the decline primarily to the lower volumes of commercial and industrial waste as of March and to both lower volumes and prices of secondary raw materials, particularly recovered paper. Veolia had likewise observed a drop-off in C&I waste tonnages in other markets including Germany, the UK, Asia and Australia.

In the UK, Veolia recorded increased landfilled volumes at good prices following the implementation of the Dutch tax of around €33 per tonne on waste imported for incineration. The government of the Netherlands extended the existing tax on incinerated waste to waste imported for energy recovery as of 1 January. This shift in volumes from energy recovery in the Netherlands to landfill in the UK seems to bear out the concerns expressed by Dutch waste to energy plant operators and British waste management companies that the Dutch tax would only increase landfilling and not, as intended, raise recycling rates.

Full coverage of Veolia's quarterly report will appear in the print and e-paper edition of EUWID Recycling & Waste Management 10/2020 out on 13 May.

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