Renewi confident despite slip in recyclate prices

(Sharecast News) - Waste-to-product specialist Renewi said in an update on Thursday that group revenue and earnings before interest and taxes (EBIT) for its first quarter were lower year-on-year, largely due to the exceptionally high recyclate prices in the first quarter of last year. The London-listed firm said recyclate prices had, however, since stabilised at levels slightly above historical averages, mitigating their impact on its financial performance.

It said its dynamic pricing approach, cost management measures, and the benefits of the ''Renewi 2.0' strategy also contributed to offset the effects of fluctuating recyclate prices.

Renewi noted that the commercial division, volumes in Belgium had stabilised, indicating a more steady performance in the region.

In the Netherlands, there had meanwhile been some pressure on volume due to a decline in construction activity, as the peak levels observed during the Covid-19 pandemic were now returning to normal.

On a positive note, the company's specialities division exceeded expectations in the three months ended 30 June, and the M&W segment was reportedly making progress in transitioning to the production of construction materials.

During the quarter, Renewi said its core net debt widened by €18m, bringing it to €388m.

It put the rise in debt down to the deployment of capital in its circular innovation pipeline, as it was actively investing in projects that promoted the circular economy, including the Acht rigid plastic processing plant in the Netherlands and the Puurs site in Belgium.

Recently commissioned growth projects focussed on organic waste to biofuels, high-quality plastics derived from waste electrical goods, and compliance with the Vlarema 8 advanced sorting legislation were said to be performing well in Amsterdam, Waalwijk, and Ghent, respectively.

"At this stage of the year, the group expects to deliver full year results in line with market expectations and remains confident in the group's growth opportunities in the medium term as legislation encourages the transition to circular economies," the Renewi board said in its statement.

Reporting by Josh White for Sharecast.com.