Viridor is to review the value of its assets and does not expect profits to increase significantly in the next financial year, the firm’s parent company said.
In an Interim Management Statement, the Devon-based Pennon Group, said global economic conditions continued to hit the firm, and with recyclate prices significantly below H1 2012/13 levels, it remained cautious about the prospects for further recovery.
The statement said: “Viridor is continuing to respond aggressively to the ongoing near-term challenges. With the weakness in recyclate prices and the continuing reduction in landfill volumes we expect PBIT plus joint ventures in 2013/14 to be broadly similar to the current year. As a result of these factors we are reviewing the carrying values of some of Viridor’s assets and environmental provisions (any impairment or additional charges would be non-cash items) and we will update the market in our preliminary results announcement.”
After 2014/15, the company said it expects significant growth from its energy from waste projects, citing:
- Financial close achieved for the Glasgow Design Build Finance Operate project (July 2012) and planning application for the Recycling and Renewable Energy Centre, which is part of the project, approved (January 2013)
- Financial close achieved for the South London Waste Partnership PPP (November 2012)
- Planning approval (January 2013) and financial close (February 2013) achieved for the Peterborough PPP
- Provisional preferred bidder achieved for the South East Wales residual waste project (Prosiect Gwrydd) (February 2013)
- Pennon said the group was on track to meet management expectations for 2012/13, and is in line with market expectations.
In November the firm blamed a recyclate price slump for a 26.5%, £8.1m drop in profits at the waste business for the first half of 2012/13.