Waste management service provider Tox Free Solutions Limited (ASX: TOX) reported a solid 10% increase in half-year revenue, however reported net profit after tax was up only 1%. Its main business segment of waste services saw a strong gain in revenue and operating earnings, yet earnings from its technology and environmental services were down due to less project work from offshore oil and gas development.
Here are the key half-year results:
Revenue $207.3 million, up 10% from $188 million
Earnings before interest, tax, depreciation and amortisation (EBITDA) $37.3 million, up 7% from $31.8 million
Net profit after tax (NPAT) reported NPAT $12.3 million, up 1% from $12.2 million
Earnings per share 9.73 cents per share, down 2% from 9.92 cps
Dividend per share interim dividend 4 cents per share, up 33% from 3 cps
Business highlights:
– Revenues were driven by increased commercial waste volumes in Queensland and greater service work for the Surat Basin oil and gas region as well as around the port of Gladstone. Near WA, the company's work at Chevron's Gorgon LNG project is stable and Tox Free Solutions was awarded a significant contract for industrial waste.
– Work in the Pilbara is stable and solid for waste management as production volumes of iron ore are still rising. More ore production means more waste management needs. Tox Free Solutions has work contracts with the major miners like BHP Billiton Limited (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).
– Tox Free Solutions was awarded a 3-year contract with the NSW EPA for household hazardous waste. The company is also attempting to expand its services and business footprint in the Cooper Basin oil and gas region and other SA mining areas.
Tox Free Solutions' biggest competitor Transpacific Industries Group Ltd (ASX: TPI) reported a half-year net loss this month due to mechanical issues temporarily grounding its truck fleet ,while it is also in the middle of restructuring and downsizing its business. Of the two, at this time perhaps Tox Free Solutions may have better growth prospects.
