Morristown, N.J.-based Covanta Holding Corp.’s first quarter total revenue was $458 million, which is up from $404 million in the year prior. Adjusted EBITDA was $100 million, up from $51 million from a year ago.
Covanta struggled with unplanned downtime at its facilities in 2017, but the first quarter of 2018 is showing drastic recovery, as the company’s Fairfax, Va., plant is back to being fully operational.
"We are off to a strong start in 2018, with improved year-over-year performance across our portfolio that supports our full-year guidance," said Stephen J. Jones, president and CEO of Covanta, on a call with investors. "We are proud of the recovery of our Fairfax facility, where our previous investments are now resulting in record performance. Concurrently, our international development efforts continue, and we expect to reach financial close on the Rookery project in the coming months. I am pleased by our performance during the year thus far as well as the progress on our growth initiatives and remain enthusiastic about our opportunities to grow over the long-term."
Here are some other highlights from the firm’s results:
- Excluding commodity prices, the company grew the top line by $28 million organically.
- The company had strong performance across its fleet, particularly in Fairfax.
- Dublin operations added $17 million of revenues and contributed $13 million in adjusted EBITDA in the first quarter.
- Adjusted EBITDA increased by $49 million since Q1 2017. Adjusted EBITDA grew by $28 million on an organic same-store basis with a full quarter of strong operations at Fairfax being the most significant driver, contributing an additional $24 million year-over-year.
- The company saw improved overall results across its fleet as it experienced significantly less unplanned downtime compared to last year.
- On the commodity front, Covanta saw $4 million of adjusted EBITDA benefit from improved energy and metals prices.
- Waste and service revenue saw 6 percent same-store volume growth, primarily due to a full quarter of operations at Fairfax.
- Environmental services revenue increased 10 percent, with 3 percent organic growth.
- Energy revenue increased 15 percent, including nearly 10 percent same-store improvement. Similar to waste, the biggest driver was improved volume given the full quarter impact from Fairfax.
- Recycled metals revenue also increased. On the ferrous side, first quarter same-store realized prices increased by 12 percent. On the non-ferrous side, first quarter same-store realized prices increased by $5 million, nearly doubling from 2017.
- Free Cash Flow was negative $52 million for the first quarter, which reflected much of the working capital outflow that the company anticipated for the year. The company expects to see working capital movements normalize dramatically from here.
- For 2018, the company plans to invest about $20 million in organic growth projects relating primarily to materials processing facilities in its CES business and increased metal recovery.
- The company is officially moving ahead with its preparations for the New York City 91st Street marine transfer station. The company expects to spend a total of around $35 million on transportation equipment, with roughly $15 million in 2018 and the remaining balance in 2019.
- The company received a permit to process regulated medical waste at a third plant in its energy-from-waste fleet.