Covanta: Fairfax plant runs at record levels in Q1

By Erin Voegele | May 02, 2018

Covanta Holding Corp. recently released first quarter 2018 financial results. During an April 26 investor call, the company provided updates of its waste-to-energy projects, including the restart of the Fairfax County, Virginia, plant.

Stephen Jones, president and CEO of Covanta, said the Fairfax County facility restarted in late December after nearly a full year of downtime caused by a fire. “Investments we made prior to that event are paying off and the plant is now running at record levels,” he said. “In the first quarter the plant processed more waste than it had in any prior first quarter while achieving the highest quarterly power generation in its history.”

Jones also provided an update on its partnership with the U.K.-based Green Investment Group and operations at the Dublin, Ireland, waste-to-energy plant. “From a business standpoint, we continue to operate the Dublin plant and it is performing at a very high level,” he said. “Our development efforts with GIG in U.K. are progressing. The Rookery plant has received its operating permit.” While Jones said the company understands a local group may challenge the permit, the U.K. Environmental Agency will defend its decision to grant the permit. “Give the Environment Agency’s rigorous permitting process, we expect that the claim will fail,” Jones continued.

Covanta reported first quarter energy revenue increased 16 percent, including nearly 10 percent same-store improvement. Jones said the biggest driver was improved volumes given the full quarter impact of Fairfax. “Same-store pricing also increased 3 percent in Q1 as we benefited from colder weather, which had a positive impact on market prices,” he said.

Operations at the Dublin plant contributed $5 million in revenue during the quarter, Jones added. “However, going forward, we will not receive power revenues from Dublin under the O&M agreement that we will still participate in the plant’s performance through our 50 percent ownership,” he said.

Overall, Covanta reported operating revenue of $458 million for the quarter, up from $404 million during the same period of last year. Net income reached $201 million, compared to a net loss of $52 million during the first quarter of 2017. Basic earnings per share reached $1.55, compared to a loss of 41 cents per share during the same three months of 2017. Diluted earnings per share reached $1.53, up from a loss of 41 cents per share during the first quarter of last year.