Shanks’ municipal division has recorded an 81% fall in trading profit year-on-year.
Interim results for the six months ending 30 September show a drop from £5.2m last year to just £1.1m in the latest figures.
The report mentions a number of factors including pressure on output prices, a constrained domestic solid recovered fuel market and increased costs of disposal.
It also notes insufficient feedstock for the firm’s Westcott Park anaerobic digestion plant in Buckinghamshire.
A six-month delay at the Derby energy-from-waste facility due to its contractor Energos’ insolvency, resulting in liquidated damages charge of £1.7m, is mentioned.
The report also blames a slower than anticipated ‘ramp up’ on its Barnsley, Doncaster and Rotherham partnership and Wakefield contracts.
Group chief executive Peter Dilnot said: “In the municipal division, it has been a challenging first half for operational and market reasons that we have discussed previously. We are clear about how we need to address those and I am confident that we will do so, starting with the second half.”
Elsewhere, the group’s commercial waste division performed strongly, with trading profit up 20% to £11.1m.
The group’s overall revenue and underlying profit growth is in line with its expectations.
Its merger with Dutch firm Van Gansewinkel Groep BV (“VGG”) is expected to close early next year following anti-trust clearance in Belgium and the Netherlands.