Covanta announces shutdown of Maine, California biomass plants

By Erin Voegele | April 28, 2016

On April 26, Covanta Holding Corp. released first quarter financial results, reporting that the company’s biomass assets have recently been idled. Overall, total revenue increased, reaching $403 million compared to $383 million during the same period of last year. An increase in waste and service revenue was partially offset by decreases in energy and recycled metals revenue.

During an investor call, Stephen Jones, president and CEO of Covanta, noted the company shutdown all of its biomass facilities in April, and doesn’t anticipate any additional biomass revenues for the remainder of the year. He also said that the company is continuing to look at options for its biomass assets. Brad Helgeson, executive vice president and chief financial officer, cited economics in the current energy price environment as the reason Covanta shutdown those facilities.

The company owns several biomass energy plants in California and Maine. In January, the company announced plans to close its biomass plants in West Enfield and Jonesboro, Maine, by the end of March. Covanta also owns more than 40 energy-from waste (EfW) facilities, which were not affected by the decision to idle the company's biomass plants.

According to Covanta, its first quarter same store North America EfW revenue decreased by $5 million. This includes a $4 million increase in waste and service revenue, a $3 million decrease in energy revenue and a $7 million decrease in recycled metals revenue. Also within North America EfW revenue, contract transitions resulted in an increase of $3 million. All other revenue from non-EfW operations increased by $22 million on a consolidated basis.

 Adjusted EBITDA declined by $3 million to $76 million, primary due to lower prices for energy and metals and the timing of plant maintenance expenses, partially offset by the contribution of the New York City MTS contract and newly acquired environmental services businesses. Net loss was $37 million, in line with the same period of 2015. Adjusted EPS was a 19 cent loss, compared to a 13 cent loss during the first quarter of 2015.