Recycling and waste management company Viridor has reported that profit before tax has fallen 8.4 per cent to £57.6 million.
In the annual results of its parent company Pennon Group up until 31 March 2012, it said that recyclate prices have fallen from their first half 2011/12 peak reflecting world economic conditions.
Pennon Group chairman Ken Harvey said: “Viridor made very substantial progress during the year in progressing its pipeline of PPP and EfW projects. However, as expected the full year profits for Viridor are below those of last year.
“Viridor experienced a reduction in recyclate prices in the second half of the year, reflecting world economic conditions and increased bid costs associated with the company’s growing pipeline of long-term projects.
“Accordingly, we took action to reduce the cost base which recovered more than 50 per cent of the impact of reduced recyclate prices.
“Viridor’s financial performance will continue to be impacted by trends in recycling and landfill. We are cautious about the prospect for a recovery in recyclate prices in the near-term. Looking further ahead, our growing pipeline of projects will ensure the future success of the company and could more than double Viridor’s EBITDA within the next five years.”
Viridor reported that recycling remains its largest profit generator. During the year, recycling volumes traded increased by 124,000 tonnes to 1.8 million tonnes.
Higher value recyclates were up 17.4 per cent or 198,000 tonnes (110,000 tonnes from acquisitions) and lower value recyclates were down 12.8 per cent or 74,000 tonnes.
Overall average recycling revenues from gate fees and recyclates sales in 2011/12 were up 6.8 per cent to £118 per tonne.
Revenue per tonne eased from an above trend level of £125 in the first half of 2011/12 to £111 in the second half.
The company has projects in the pipeline including becoming preferred bidder for the 25-year South London Waste Partnership residual waste PPP and confirmation that it is a successful participant in the 25-year Glasgow PPP among others.
Overalll, profits for the Pennon Group were up 6.4 per cent to £200.5 million.