A fall in the value of recyclate has led to waste management firm Shanks warning that its profits may fall below expectations.
The company warned that “the sharp fall in commodity markets has had an impact on recyclate prices and offtake markets for waste recyclers”.
However, Shanks said that it had managed to offset much of the fall through cost-saving measures in both its commercial and municipal divisions.
Its hazardous waste division has also suffered as a result of the deterioration of the oil and gas sector, which made up approximately half of its revenues.
As part of its trading update, Shanks also announced the sale of 100% of the subordinated debt and 49.9% of the equity in its Wakefield PFI contract to Equifax, which has helped its net debt fall to £195 million.
But Shanks noted that profits will likely be lower than previously forecast. It said: “While the group continues to deliver a strong improvement in the commercial division, it has not been possible to compensate fully for the impact of the more challenging conditions in the hazardous waste and municipal markets.
“As a result, the board expects the group to deliver a result for the year ending 31 March 2016 which is slightly below its previous expectations.”