Covanta Holding Corporation (CVA) reported third quarter results for 2020 showing strong results during an earnings call on October 30.
But, before they went into the financials, Sam Zell, Chairman of the Board said the company is launching a strategic review of the company’s operations, growth priorities, and capital structure and he announced that Michael Ranger has been appointed as President and Chief Executive Officer to lead the review.
Ranger succeeds Stephen Jones who is stepping down from his roles at Covanta.
"We believe that now is the right time to review and refocus our strategy to capitalize most effectively on Covanta's strengths. Mike brings significant depth of experience in the power and waste-to-energy industries, with specific expertise in driving strategic and structural improvements in infrastructure businesses, and we are fortunate to have him lead this initiative for Covanta,” said Zell.
Zell then handed the call over to Covanta’s CFO to go over the third quarter earnings.
The company cited key points for its solid performance:
- Year-over-year growth in Adjusted EBITDA
- Waste markets returning to near pre-pandemic levels
- Effectively navigating challenging operating environment
- UK project development progressing on schedule
"During the third quarter we saw continued recovery from the initial months of the pandemic, most notably in the waste market, with tip fees up three percent year-over-year," said Covanta's CFO Bradford J. Helgeson. "While the operating environment remains challenging, our team has performed at a very high level, as our facilities matched last year's strong availability. We will continue to focus on operating safely and reliably, while progressing our growth initiatives, particularly in the UK."
During the company’s earnings call, Helgeson said they’ve sustainability processed 5.5 million tons of waste in the third quarter. There is an adjusted EBITDA of $128 million which is up from September 2019 and there is a free cash flow of $3 million for the third quarter with $84 million year-to-date.
He said the waste market is returning to near pre-pandemic levels with continue recovery in commercial and industrial volumes and same store waste-to-energy tip fee pricing is up three percent.
Looking ahead, Covanta is entering into a new municipal contract with Town of North Hempstead, N.Y. to increase residential flows to its key facility. And, growth in the United Kingdom is continuing to move forward with three projects under construction with one set to start operating as early as 2022, said Helgeson.
"We have already begun to re-align the management team in order to sharpen our focus on key priorities. Derek Veenhof will lead our core domestic waste-to-energy business as Chief Operating Officer, with responsibility for commercial activities, facility operations and asset management. Further, I am pleased that Owen Michaelson, a Covanta director since 2018, will be joining the team in January as President of Covanta Europe. Owen brings his three decades of experience in development and the waste industry in the UK to our growing business in the UK and Ireland,” said Ranger.