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China import bans hit Viridor profits

new viridor logo 2016

The restrictions on waste imports to China has forced Viridor to increase operational costs by £3m during the past year to meet stricter contamination standards.

Announcing its full-year financial results, Viridor said the “challenging recycling market” had led to the company focusing on “asset and contract optimisation, innovation and accessing new markets”.

Both Suez and Veolia have also recently reported lower revenues due to the China situation.

Viridor said the UK recycling market “needs fixing”, but added: “We are encouraged that the Blue Planet effect is spurring action, and we are optimistic that positive changes will be announced in the Resources & Waste Strategy later this year, creating a UK recycling system fit for the future.”

The company has been bolstered by healthy performance of its energy-from-waste (EfW) portfolio, as it had reported in its half-year results

The company is clawing back a substantial sum from construction firm Interserve, which was booted off the Glasgow EfW project in 2016 due to ongoing delays.

In March, Viridor warned that the project was £95m over budget.

It its report, the company said: “Viridor is contractually entitled to recover incremental costs from the original principal contractor, Interserve, under certain circumstances, £69m receivable recognised at year end.”

Viridor’s parent company Pennon Group posted a 2.3% increase in revenue in 2017-18 to just under £1.4bn.

Chris Loughlin, Pennon chief executive, said: “Pennon has delivered a strong performance this year across water and waste.”

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