Cleanaway Waste Management Limited (ASX: CWY) has released its first half earnings to the market today, for the period ending 31 December, 2019. The business reported underlying net profit after tax of $76.2m (up 13.7%), which is a beat on consensus expectations of $67m. This strong half has also lead to a full-year EBITDA range of $515m – $525m, also ahead of expectations – with an uplift to the margin as well.
During the half, CWY also completed the acquisition of SKM recycling assets and signed an MoU to build a plastic pelletising plant. The Toxfree acquisition is also trekking well and is on track to achieve its $35m synergy targets. The introduction of the Queensland waste levy led to reduced volumes into CWY’s Queensland landfill.
The result does not mention the Chinese National Sword Policy as an ongoing issue anymore. This may mean the footprint 2025 strategy for the business is on track, as Cleanaway moves towards a circular economy and leverages its collection to processing business model.
As is expected with a strong earnings beat on consensus (in this case 13.7%), the share price has rallied by a similar amount. One hour after market open the stock was trading for $2.14 per share, more than an 11% over its price of $1.90 at market close yesterday.
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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