Preliminary financial results from Viridor’s owner Pennon Group show that the waste company’s earnings are up by 5.4%.
The revenue growth is largely attributed to the increase in operational energy recovery facilities which made up for shortfalls in landfill gas power generation and the weak market for secondary materials.
Viridor has brought five new energy recovery facilities on stream in the last 12 months as part of an on-going strategy which is expected to contribute £100m to the company’s EBITDA in 2016-17.
Earnings rose by more than £4m from £76.3m in the 2013-14 earnings report to £80.4m in 2014-15.
The report notes that Viridor’s financial performance has been in line with expectations despite current market conditions in recycling.
It says that during the year, recycling volumes traded decreased by 151k tonnes (8.4%) to 1.7m tonnes.
“Recyclate prices, whilst slightly lower for 2014-15, have now stabilised to some degree for most commodities but remain under pressure, reflecting world economic conditions and competitive markets.
“Overall, average revenues per tonne from recyclate sales and gate fees for the year fell to £86 per tonne, 7.7% lower than for 2013-14. Viridor remains cautious about future recyclate price growth”.
It goes on: “Profits in the collection business were ahead, reflecting the benefits of sustained management action. Collection remains a key focus in securing increased input tonnages for the business.”
Chief executive Ian McAulay, left, said: “Viridor has now passed a strategic point of inflexion for the business.
“Viridor is well-positioned in its other businesses given regulatory drivers for recycling from the EU and UK Government, significant cash being generated in landfill energy, and contracts and collection providing valuable input materials for our ERF and recycling businesses.”
In April, final planning permission for a £200m energy recovery facility in Beddington, Sutton, was awarded to Viridor.
In the same month, the company shut down a landfill site in Oxfordshire with all waste being diverted to its recovery facility nearby.