Shanks Group has posted a 39% drop in pretax profits for the six months to September 2014.
Revenue for the period was down 6% year-on-year to £304.8m. Underlying profit before tax fell from £18.3m to £11.2m.
The waste management firm said the “increasingly difficult” solid waste market in the Benelux region was a key driver of the negative performance, with lower prices and recyclate income.
Shanks said it is implementing a “commercial effectiveness programme” in the Netherlands that would allow it to focus on areas with higher margins.
Chief executive Peter Dilnot, above, said: “We are confident that the actions we are taking to address these market pressures and improve our operational efficiency will support a stronger second half and a full year result in line with our revised expectations.”
There was better news from the UK Municipal arm, which Shanks called “a key growth driver for the group”. Revenue grew 6% year-on-year to £74.9m, while profits grew 13% to £5.3m.
Shanks said the growth was primarily driven by a gasification project in Derby and “stability or modest growth” across all other projects.
In August, the company secured £195m in funding for the PPP scheme in partnership with Derby City and Derbyshire County Councils
Looking forward, the company said: “Despite the current market challenges, there remains a fundamental and growing need to manage waste without damaging the environment,and this is underpinned by continuing legislation and regulation. Governments in all the territories in which we operate are actively seeking to increase diversion and recycling rates.
“Our unique focus on recycling and our deep experience with waste-to-product technologies therefore positions us well for the future.”