Morristown, N.J.-based Covanta has announced its 2018 fourth quarter and full-year results. During a call with investors on February 15, Covanta revealed that 2018 was the safest year in the history of the company. In addition, the company said it processed more waste, generated more energy and recovered more metals in 2018 than it has in any other year.
“From a performance perspective, what a year. We set records seemingly across the board. We processed more waste, generated more energy and recovered more metals than we have in any other year in the history of the company,” said Stephen J. Jones, Covanta president and CEO, on the call. “We processed a record 20.4 million tons, reflecting a full year of Dublin operations, the addition of two large Palm Beach plants toward the end of the year and processing records at six different facilities, which is a credit to our operating teams and demonstrates how the continuous improvement initiatives are bearing fruit. We expect that we’ll see more of the same in 2019, with even higher throughput given the full-year contribution from Palm Beach.”
“We believe that safety performance and operational performance go hand-in-hand,” he added. “A lot of plants set production records in 2018, and we also had the safest year in the history of the company. Our energy-from-waste plants saw a 31 percent reduction in incidents year-over-year, and our total case incident rate, which is a measure of the number of incidents to total hours worked, was at the lowest level in the company’s history. This is a fantastic accomplishment. Safety is about what we do every day, and we will continue to strive for zero incidents in the future.”
In addition to improving safety and hitting milestones in a number of areas, the company has expanded its presence in the U.K.
"We have taken significant steps toward our strategic growth objectives, with our first U.K. project and first TAPS [Total Ash Processing System] project recently moving into construction,” said Jones in a statement. “Looking ahead to 2019, we expect to generate significantly improved free cash flow, continue to optimize our unmatched domestic fleet and move several new projects into construction in the U.K."
Other highlights from the company’s performance:
- The company reported total operating revenue of $500 million for the fourth quarter of 2018, compared to $495 million in the prior year period. Total operating revenue for year-end 2018 was $1.868 billion, compared to $1.752 billion in 2017.
- Total operating expenses for Q4 2018 were $441 million, compared to $437 million in the prior year period. For year-end 2018, total operating expenses were $1.805 billion, compared to $1.651 billion in 2017.
- Covanta ended the year of 2018 with adjusted EBITDA of $457 million and free cash flow of $100 million. The company posted net income of $152 million for full-year 2018.
- Waste and service revenue grew from $1.231 billion in 2017 to $1.327 in 2018.
- Year-end energy revenue was $343 million, compared to $334 million for the prior year period.
- Recycled metals revenue was $95 million for year-end 2018, compared to $82 million for year-end 2017.
- Net cash provided by operating activities for the full year of 2018 was $238 million, compared to $242 million in the prior year period.
- For the fourth quarter of 2018, diluted earnings per share (EPS) was $0.07 and adjusted EPS was $0.03, compared to $0.09 and $0.04, respectively, in the prior year period. For year-end 2018, diluted EPS was $1.15, compared to $0.44 in 2017, and adjusted EPS was negative $0.10, compared to negative $0.37 in the prior year period.
- Same-store tip fee pricing was up 3.5 percent in 2018.
- Covanta is looking forward to the startup of the Marine Transfer Station in Manhattan, N.Y., in Q2. Covanta is partnering with New York City to provide a long-term, sustainable waste solution. Once the facility is fully operational, the company expects to receive an additional 170,000 tons annually into the system for ultimate processing at its Delaware Valley in Niagara site. In total, Covanta’s energy-from-waste plants will now manage roughly one-third of all waste collected by the city for disposal, according to Jones.
- For the year of 2019, Covanta expects adjusted EBITDA to be between $440 million and $465 million. It also expects free cash flow to be between $120 million and $145 million.