The Cleanaway Waste Management Ltd (ASX: CWY) share price is down 2.87% this morning, despite announcing a new energy-from-waste project in Western Sydney.
What did Cleanaway announce this morning?
Prior to the market open, the Aussie waste management group announced a new project to provide electricty for up to 65,000 houses in Western Sydney.
According to the release, Cleanaway plans to use non-recyclable red bin waste to cut down on landfill volumes and generate an alternative energy source.
Cleanaway's plan is a joint venture with the Macquarie Group Ltd (ASX: MQG)-owned Macquarie Capital and its Green Investment Group, which could cut down annual landfill by 500,000 tonnes.
What does this mean for the Cleanaway share price?
The latest initative is a big move for Cleanaway as it seeks to diversify its revenue and cut down on waste as part of its Footprint 2025 strategy.
Cleanaway CEO Vik Bansal said the proposal will be assessed consider the "triple bottom line", meaning its social, environmental and economic benefits.
It's hard to say what the financial impact of the project will be for Cleanaway, given the vague and non-quantitative nature of this morning's update. So far it appears investors aren't sold, with Cleanaway shares down 2.87% in morning trade.
How has the Cleanaway share price performed in 2019?
The Cleanaway share price has climbed just 17.07% higher since the start of the year in an up-and-down year for shareholders.
The company's full-year earnings result saw the Cleanaway share price fall sharply on 15 August, despite posting 84% year-on-year revenue growth.
Cleanaway's net profit after tax charged 43.1% higher to $140 million but management's comments regarding its FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) saw shareholders' confidence waver.
Should you buy Cleanaway shares?
While I'm not buying Cleanaway shares just at the minute, I am intrigued to see if the company will continue to develop more initiatives in the energy-from-waste space.
There could be a huge opportunity for Cleanaway to monetise these types of initiatives across Australia in the coming decade, but I would like to see further strong revenue growth before buying in.
