Operating contracts at Renewi’s Barnsley, Doncaster and Rotherham (BDR) and Wakefield facilities are continuing to make a loss, the group has reported in a trading update.
In May 2017, the company’s annual report said its municipal division had recorded a trading loss for the year of £2.7m because of “operational challenges” at the two sites and other cost pressures.
This was attributed to a fall in value of refuse-derived fuel and ’exceptional charges’, including costs in restructuring the business.
Renewi, formed by the merger of Shanks and Van Gansewinkel Groep, said in the trading update: “The municipal division has performed in line with our revised expectations for the year, as highlighted at the interim results, delivering good operational progress against the recovery plans.
”The operating contracts of Wakefield and BDR continue to be loss-making in the current market conditions, despite substantial operational improvements.”
But it said progress in the division included the passing of all performance tests at Wakefield and a new offtake contract with AEB for its incinerator in Amsterdam, which will reduce offtake costs for Renewi’s East London Waste Authority site for the next decade.
In an overview, group chief executive Peter Dilnot said: “We have continued to make good operational progress, and overall trading across the group during the seasonally quieter second half has been in line with our expectations.
“We therefore remain confident in the out-turn for the full year ending 31 March 2018. Our merger synergy and integration plans continue to progress well and we remain on track with the target synergies and delivering significant value accretion from the merger.”