The Cleanaway Waste Management Ltd (ASX: CWY) share price is under pressure on Friday following the release of its full year results.
In early trade, the waste management company's shares are down 4% to $2.46
Cleanaway share price falls on soft FY 2022 outlook
- Revenue increased 4.7% to $2.2 billion
- EBITDA rose 3.8% to $535.1 million
- Operating cash flow up 5.7% to $424.4 million
- Underlying net profit after tax increased 2.1% to $153.2 million
- Final dividend up 11.9% to 2.35 cents per share, bringing full year dividend to 4.6 cents per share
- FY 2022 outlook: NSW lockdowns having negative ~$4 million EBITDA monthly impact
What happened in FY 2021 for Cleanaway?
For the 12 months ended 30 June, Cleanaway reported a 4.7% increase in revenue to $2.2 billion and a 2.1% lift in underlying net profit after tax to $153.2 million. This was driven largely by the company's Solid Waste Services business, which recorded a 7.5% increase in revenue to $1,476.3 million and a 4.4% increase in EBITDA to $405.5 million
Management advised that this reflects full year contributions from Statewide Recycling and the VCRR businesses (former SKM assets) and initial contributions from and Stawell landfill, Grasshopper Environmental (NSW C&D collections), and the Pinkenba Recycling acquisitions. This was offset slightly by lower post collections volumes at the Erskine Park inert landfill in Sydney. This was due to delays in work being undertaken to construct a mechanically stabilised earth (MSE) wall.
What did management say?
Cleanaway's Chief Operating Officer, Brendan Gill, commented "In what has been a challenging operating environment I am pleased with the way our business and our people have responded to deliver a strong set of financial results. This once again reflects the diversification of our customer base and service offerings."
"FY21 presented ongoing challenges and disruption caused by the COVID-19 pandemic and severe weather events. Some regions were more affected than others and we adapted how we work and operate to ensure we could continually service the needs of our customers and the community."
"The defensive characteristics of our revenue streams continue to underpin our financial performance. Each of our three operating segments grew their earnings during the year," he added.
What's next for Cleanaway?
The company's outlook statement appears to be weighing on the Cleanaway share price today.
It advised that heading into FY 2022 there was strong underlying momentum in the business. As such, it was expecting to grow its earnings had COVID-19 impacts been broadly similar to FY 2021.
However, it notes that the duration and nature of the current NSW lockdowns and potential medium-term implications on economic activity is more severe than in FY 2021.
So much so, under the current policy settings, restrictions in NSW are estimated to be having a ~$4 million EBITDA negative monthly impact. This is primarily as a result of closure of the bulk of the NSW Container Deposit Scheme, restrictions on construction activity, and weakness in the C&I market.
The company intends to provide a trading update at its annual general meeting in October.
