Covanta reports increased revenues in 2014 financial results

By Erin Voegele | February 13, 2015

Covanta Holding Corp. has released 2014 financial results, reporting revenue of $1.68 billion, up from $1.63 billion in 2013. The primary driver of the increase was North American energy-from-waste (EfW) revenue, which increased by $39 million.

A $49 million same store North American EfW revenue increase included $14 million increase for waste and service revenue, a $17 million increase in energy revenue, and a $17 million increase in recycled metals revenues.

 Adjusted EBITDA declined by $20 million to $474 million due to contract transitions, higher scheduled plant maintenance expense, lower construction profit, and one-time gains that occurred in 2013.

Adjusted earnings per share increased by 1 cent to 39 cents. The increase was driven by lower book interest expense and higher equity income, partially offset by lower operating income.

For the fourth quarter of 2014, revenues increased by 3 percent when compared to the same period of 2013, reaching $345 million. Adjusted EBITDA decreased $21 million to $131 million, while adjusted earnings per share decreased by 12 cents to 6 cents.

“I am very pleased with our team’s performance. We delivered a solid year operationally and financially, and we positioned Covanta for long-term growth with a number of strategic wins, most notably commencing construction of the Dublin facility and winning a new contract to operate the Pinellas facility. Furthermore, we continued our track record of successfully extending waste and service contracts, our organic growth initiatives are delivering results and we announced an important efficiency improvement program that will benefit 2015,” said Anthony Orlando, president and CEO of Covanta.

Covanta reported it is entering 2015 with 1.7 to 1.8 million MWh of generation at market, including 1.5 to 1.6 million MWh from EfW and 0.2 MWh from biomass. Current spot and 2015 forward prices are below 2014 levels, and same the same store market price decline is expected to be approximately a $25 million impact this year, including $20 million for EfW and $5 million for biomass.

During an investor call to discuss the financial results, Orlando confirmed Covanta’s operational biomass plants are profitable at current prices. He indicated they will continue to run unless prices are low enough they are no longer profitable. Orlando also noted that there is upside opportunity for the biomass plants if prices improve.