Covanta reports strong first quarter results
Covanta Holding Corp. has released financial results for the first quarter of 2014, reporting increased revenues and that higher energy prices due to cold weather had a net positive effect on results.
"All of our key metrics came in better than last year, largely due to higher energy prices and the timing of planned maintenance,” said Anthony Orlando, president and CEO of Covanta. “Our steady operations during the cold winter weather resulted in a net benefit, with higher energy prices partially offset by a number of factors. This was all generally consistent with our expectations and our full year guidance outlook is unchanged.”
Revenues for the quarter increased by $29 million when compared to the same period of 2013, reaching $401 million. Covanta attributes the increase to higher waste tons processed and higher energy pricing at both energy-from-waste and biomass facilities, the Camden acquisition last year and successful efforts to increase the quantity and quality of the metal the company recovers. According to Covanta, those benefits, however, were partially offset by lower construction revenue and lower debt service revenue.
Quarterly operating expenses decreased by $3 million, reaching $377 million. Operating income improved by $32 million, reaching $24 million. Adjusted EBITDA increased by $26 million, to $87 million. During the quarter, the company increased its cash dividend by 9 percent to an annualized 72 cents per share.
During a call to discuss Covanta’s first quarter results, Orlando noted that higher energy prices benefited the company’s entire energy-from-waste portfolio. “Our main biomass facilities were able to run flat out to capture the benefit of higher prices,” he continued. While the cold weather provided benefit in terms of increased energy prices, Orlando specified those benefits were partially offset by three factors. Lower temperatures resulted in higher fuel expenses, lower that planned contracted waste deliveries and operational challenges, including a small adverse impact to metal recovery rates.