The owner of Viridor has said that it expects earnings from recycling to be lower in the second half of its financial year as a result of the impact of losing China as a market for plastics and mixed paper.
In a trading statement for its results until 31 March 2018, to be published in May, Pennon Group said: “In recycling, Viridor is focused on mitigating the impacts of China’s changes in recyclate import regulations, through developing new markets, continued contract optimisation and innovation. As such, Viridor anticipates lower H2 EBITDA from recycling although this is not expected to have a material impact on Pennon’s overall financial performance.”
It also reported that costs for its Glasgow energy from waste facility are expected to be £95 million higher than previously projected, but discussions were ongoing with the original contractor Interserve to resolve the contract. This is because Viridor was contractually obliged to take up the costs when it was forced to change contractor from Interserve. The Glasgow facility is now close to completion.
Overall, Pennon Group reported that it should meet management expectations of its financial performance.