Covanta releases Q3 results, provides update of EfW projects

By Erin Voegele | October 29, 2018

On Oct. 25, Covanta Holding Corp. released third quarter 2018 financial results, reporting increased revenue and adjusted EBITDA. The company also provided an update of its waste-from-waste (EfW) operations, including the acquisition of two new plants.

During an investor call, Stephen Jones, president and CEO of Covanta, said the company acquired the operating company for two large EfW plants in Palm Beach County, Florida, during the third quarter. “This acquisition represents a natural step for us as we leverage our leading operational capabilities to serve the Palm Beach County Solid Waste Authority,” he said.

Jones also highlighted the company’s Fairfax EfW facility in Virginia, which resumed operations in December 2017 following a fire earlier that year. Covanta made several improvements to the facility following the fire. “We've highlighted Fairfax a few times this year, partially to juxtapose with last year, but also because it's clear evidence that our investments are paying off,” Jones said. “In 2018, in its 28th year of operations, the Fairfax facility will set records for waste processing and megawatt hours generated. But it's far from the only success story in the fleet as several of our large tip fee facilities are also performing at or near record levels.”

During the third quarter, Jones said the Dublin EfW facility had its first major planned outages of its two boilers. He said the company is very pleased with their condition and operations. “The operating expertise and capabilities we've developed over three decades of U.S. operations have clearly translated to the Irish market,” Jones said. “We look forward to similar operating successes in the U.K.”

In addition, Jones provided an update of Covanta’s U.K. development efforts. “First, I'd like to mention our involvement in a new project near Edinburgh, Scotland that is referred to as the Earls Gate Energy Center project,” he said. “We've been engaged in the development of this 215,000 metric ton per year facility in conjunction with the Green Investment Group for GIG and their partner Brockwell Energy. Due to our partnership with GIG, we have the right to invest in this project when it reaches financial close in the coming months. We expect to own 25 percent of the equity and it is a fourth of the advanced projects we have previously discussed. This project is far along in development with planning and permits in hand as well as an agreement for long-term waste supplies. The project will sell the bulk of its power and all of its steam to a neighboring chemical facility under a long-term energy supply agreement.”

Regarding the company’s Rookery project, Jones said a hearing was held in October relating to a claim challenging the Environment Agency’s issuance of an operating permit. He said the company is confident the court will rule in the agency’s favor. “We expect to receive the court's decision shortly and regardless of the decision, we expect to reach finance close in 2019,” he said, noting the company is also continuing to make progress on Protos and Newhurst, the two projects where it is partnering with Biffa. Those projects are also well positioned to reach financial close next year, he said.

Covanta and GIG entered into a partnership in late 2017 to develop, fund and own EfW projects in the U.K. and Ireland. Information published by Covanta indicates the Rookery facility is expected to process 500,000 metric tons of residual waste per year, generating more than 60 MW of energy.

Covanta reported $456 million in revenue for the third quarter, up from $429 million during the same period of 2017. Net loss was $27 million, compared to a net income of $15 million during the third quarter of last year. Adjusted EBITDA was $122 million, up from $117 million during the same quarter of 2017.