Veolia Environnement posted a 28.4% increase in pretax profits for the first half of the year despite decreasing revenues and difficult conditions in the environmental services division.
The French waste and water management company’s pretax profits rose to €539m (£466m), while revenues were done 3.3% year-on-year for the first six months of 2013.
Negatively affecting the company’s performance were activities in water and the environmental services divisions, with the latter impacting total revenues for €98m, or 3% year-on-year.
The decline in the environmental services division was driven by falling volumes and prices of recycled materials, said Veolia, citing a 15% drop in the prices of recovered paper, and a 12% fall in the prices of scrap metals.
However, a source of growth was waste management activities in the UK, which represent the highest share - 20% - of revenues in Veolia’s environmental services division.
Revenues were up 1.7% year-on-year due to a progression in Private Financial Initiative contracts, and stable landfill volumes, said the firm.
Overall, the company’s performance improved from a shaky start of the year: In the first quarter Veolia had reported revenues and pretax profits down 3.9% and 1.5%, respectively.
The improvements reflected the initial impact of the company’s restructuring effort, which has been in place for the last 18 months, according to Antoine Frérot, chairman and chief executive at Veolia Environnement.
“They show that the company is fully on the charted path to recovery and profitable growth,” he said.
As part of the company’s restructuring programme, announced in July, Veolia has been reorganised on a country-based structure, with water and environmental services placed under the management of a single director per country.