The Cleanaway Waste Management Ltd (ASX: CWY) share price has been dumped today despite the company posting double-digit growth numbers in its FY19 full year results which were released this morning. CWY shares opened 14.7% lower this morning at $2.03.
What do Cleanaway's numbers look like?
Cleanaway posted a strong set of numbers for FY19:
- Gross revenue up 33.2% (from FY18) to $2.28 billion
- Net revenue up 34.8% to $2.11 billion
- EBITDA up 35.9% to $461.6 million
- EBIT up 44.7% to $240.8 million
- Net profit after tax up 43.1% to $140 million
- Earnings per share up 40.2% to 6.9 cents per share
- Free cash flow up 76.4% to $206.4 million
- Final dividend up 35.7% to $1.9 cents per share
- Total dividend up by 42% to 3.55 cents per share
Sector by Sector breakdown
Revenue from Solid Waste Services increased by 23% year-on-year (YoY) to $1.36 billion, with EBITDA coming in at $352 million, up 23.5% YoY.
Industrial & Waste Services had revenue increases of 84% YoY to $341.9 million and EBITDA increases of 146.6% to $46.6 million. Management noted that the acquisition of Toxfree "has increased scale in this segment and was a major factor in the growth achieved"
Liquid Waste & Health Services had increased revenue of 53.5% to $495 million and EBITDA increases of 60.3% to 486.9 million. Although hazardous and non-hazardous liquid waste volumes were down YOY, management noted the restructuring of this segment as a result of the Toxfree acquisition should improve performance in this area.
Outlook
Management expects "all our segments to deliver earnings growth in FY20 despite the outlook for general economic activity in Australia". The company remains bullish on Cleanaway's 'Footprint 2025' strategy due to the waste management industry's insulation from the normal economic cycle and the opening of the new Western Sydney Waste Transfer station and Resource Recovery Centre.
Despite this, management has also noted the impacts that China's 'National Sword' policy of not accepting foreign waste and recyclables has had on sorting costs and pricing of recyclable commodities. Cleanaway expects this will contribute to "underlying FY20 EBITDA growth to moderate slightly from current market expectations."
