Cleanaway withdraws FY20 guidance, share price up 4%

The Cleanaway Waste Management Ltd (ASX:CWY) share price is up 4% after withdrawing its FY20 guidance due to the coronavirus.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The share price of Cleanaway Waste Management Ltd (ASX: CWY) is up 4% after the company gave a coronavirus update.

Here's what Cleanaway announced:

Trading update

In terms of actual operations and earnings, Cleanaway said that its performance remains in line with its internal forecasts and its FY20 earnings guidance. It also said it hasn't seen any material change in volumes across any of its operating segments so far.

However, due to the increasing uncertainty in the market because of the coronavirus outbreak, especially in the small and medium enterprise (SME) segment, management thought it was prudent to suspend its FY20 earnings guidance.

What about the balance sheet?

Cleanaway reassured the market by saying it has a strong balance sheet and "significant" liquidity with more than $357 million of committed headroom available at the end of February 2020 under existing banking facilities.

In addition to that, in February 2020 the company issued long-term notes in the US private placement market, which increased the weighted average maturity across our debt facilities to around six years.

The ratios of 'EBITDA to net debt' and 'interest cover' are well within the company's debt covenants according to management.

What about the dividend?

Cleanaway has confirmed that it will continue with its previously announced interim dividend of 2 cents per share which will be paid on 3 April 2020.

CEO comments

Cleanaway CEO and Managing Director Vik Bansal said: "Cleanaway provides a range of essential services to a diverse customer base which includes municipal councils, government infrastructure, hospitals, resources, manufacturing, commercial and industrial customers.

"As the COVID-19 situation evolves and uncertainty increases, we expect the SME part of our C&I waste volumes to be impacted. At this stage, we expect the demand for other services, such as health, municipal collections and related post-collections services to remain strong.

"We are taking measures to help ensure the safety and welfare of our employees and customers and we remain confident in the resilience of our business."

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Coronavirus News

Man with his hand on his face looking at a falling share price chart on a tablet.
Share Market News

ASX 200 stocks dive 2.4% in worst trading day since Ukraine crisis hit

It's not a good start to the week for the market.

Read more »

A woman looks nervous and uncertain holding a hand to her chin while looking at a paper cut out of a plane that she's holding in her other hand. representing the falling Air New Zealand share price today
Travel Shares

Borders just reopened so why is the Flight Centre (ASX:FLT) share price falling today?

Experts believe it may take several years for tourism levels to rebound to pre-pandemic numbers.

Read more »

A worker in hi vis gear holds his hand up saying no.
Coronavirus News

Own BHP (ASX:BHP) shares? Here's how the ASX 200 miner is battling COVID

Mining unions have not generally supported mandatory vaccinations.

Read more »

Female worker sitting desk with head in hand and looking fed up
Coronavirus News

Here's what Rio Tinto (ASX:RIO) boss says is 'causing some challenges' right now

The Omicron variant is spreading in Western Australia.

Read more »

A man wearing a mask punches the air with joy after getting a negative COVID result on a rapid antigen test.
Coronavirus News

Why are ASX COVID test shares climbing today?

COVID-19 tests are in focus again today.

Read more »

a girl stands in an apple orchard holding two red apples in raised arms with a happy, celebratory look on her face with a large smile and a pretty country background to the picture.
Economy

CBA reveals the Australian economy's leading state amid COVID surge

The states and territories have all been impacted by the pandemic.

Read more »

Rapid Antigen Test taking place.
Share Market News

Why is Ellume hitting headlines today?

Brisbane-based diagnostics developer Ellume is back in the headlines.

Read more »

A woman looks quizzical as she looks at a graph of the share market.
Share Market News

Inghams (ASX:ING) share price sinks as Omicron bites

Inghams shares are down as COVID hurts its operations.

Read more »