Covanta reports Q2 results, provides maintenance update
Covanta Holdings Corp. recently released its second quarter 2014 results, reporting revenue of $432 million, up from $411 million for the same period of last year. Net income from continuing operations was $2 million, down from $13 million in the second quarter of 2013. Adjusted EBITDA was $121 million, down slightly from $124 million during the same three months of last year.
According to information released by the company, waste and service revenues were flat, while energy revenues increased by $7 million. Recycled materials revenues increased by $6 million.
During a call to discuss the quarterly results, Anthony Orlando, president and CEO of Covanta, noted that the company’s energy segment performed in line with expectations. “In the last few weeks there has been a noticeable dip in the forwards curve. This is due to the relatively cool summer and significant natural gas production which has resulted in gas storage recovering from the cold winter depletion faster than previously anticipated. Notwithstanding this dip since we only have about 0.5 million megawatt hours exposed for the remainder of this y ear, we still expect to be within the revenue range we previously provided,” he said.
A quarterly presentation published by Covanta indicates the company sold approximately 1.4 million MWh of power during the second quarter, up from 1.3 million MWh during the same period of last year. The recent acquisition of the energy-from-waste EfW facility in Camden, New Jersey, is credited with contributing to positive results in the energy segment.
Orlando also spoke about Covanta’s maintenance activities. “We're halfway through the year and as is typically the case we've completed more than half of our scheduled maintenance activity to ensure that our plants continue running well,” he said. “During our previous quarterly call we told you that we expected maintenance expense for the quarter would come in higher than last year. The actual results came in better than we expected for a couple of reasons. First we've completed about two-thirds of our planned annual turbine maintenance and it's going well. Our proactive turbine generator inspections to date have resulted in less additional work than we had originally anticipated, and our major turbine outages are going smoothly too. Second, the benefit was just timing. We had some outage work planned for the second quarter which we have rescheduled to the second half of the year.”
Covanta operates more than 40 waste-to-energy (WTE) facilities, primarily in the U.S. It also operates two projects in Canada, one in Italy and one in China. In addition, the company also operates seven plants that generate electricity from wood waste. Together, the seven biomass plant have a combined capacity of 191 MW.