Recycling brings in about 2% of Republic’s operating revenues. Overall, the company reported $3.6 billion in revenue during the third quarter, up 23% year over year.
The company’s recycling business brought in 85 million Canadian dollars ($63 million U.S.; all dollars below converted to U.S. on Nov. 7) during the third quarter, down 14% year over year, according to the company’s quarterly report.
GFL records its recycling business result under the “material recovery” business, which is part of the larger solid waste business. The solid waste business brought in revenue of $1.09 billion and adjusted EBITDA of $314 million in the third quarter, up 27% and 15% year over year, respectively. The revenue number was driven in large part by acquisitions.
Material recovery brings in less than 5% of GFL’s operating revenue. The company reported total revenue of $1.36 billion in the third quarter, up 33% year over year.
Casella Waste Systems
The company’s recycling results are recorded under its “Resource Solutions” operating segment, which reported revenue of $80 million during the third quarter, up 27% year over year. Most of that was because of acquisitions, however.
The Resource Solutions segment includes recovered materials processing, industrial recycling, and organics and resource management services.
According to the company’s quarterly report, third-quarter Resource Solutions revenue was $17 million higher than it had been a year earlier. The company attributed the increase to several factors, including acquisitions.
Specifically, acquisitions resulted in an increase of $11.5 million, and an increase of $9 million was from higher volumes on organic business growth, favorable pricing and increased fees. On the downside, decreased commodity values and volumes reduced the year-over-year change by about $3.5 million.
During the quarter, the Resource Solutions segment reported operating income of $4.5 million, down 32% year over year.
During an Oct. 28 conference call with investors, Edmond Coletta, Casella’s chief financial officer, noted that third-quarter commodity prices were 37% lower year over year because of lower OCC, mixed paper, metals and plastic prices.
“In fact, commodity prices hit a high point back in April and have declined roughly 55% a ton from April through September with weakness across all classes,” he said.
However, during the call, CEO John Casella credited the company’s sustainability recycling adjustment (SRA) fee with helping to buffer the impact of falling recyclables prices.
“With regards to the recent performance of the recycling commodity prices, as you know, the team has done a fantastic job creating risk mitigation programs with the sustainability recycling adjustment fee,” he said. “We implemented our SRA fee several years ago and it shifts the vast majority of the recycling commodity price exposure to our customers.”
Overall, Casella reported revenue of $295 million during the third quarter, up 22% year over year.
In related news, Casella Waste Systems recently published its sustainability report.
The company’s recycling business brought in $46 million in revenue during the third quarter, down 17% year over year.
According to the company’s quarterly report, prices for OCC, aluminum, plastics and other paper products were all lower than they had been a year earlier.
In a press release, Waste Connections CEO Worthing Jackman described a “precipitous decline in recycled commodity values in September.”
In a Nov. 3 conference call with investors, Jackman said third-quarter commodity revenues were down nearly 35% year over year, excluding revenue impacts from acquisitions. The revenue fell about 30% from the second quarter, he noted, about twice as bad of a drop as Waste Connections was expecting.
The drops also cut into profits. The recycling business performance reduced adjusted EBITDA by about $10 million in the third quarter, the company’s overall adjusted EBITDA was still $588 million, up $82 million year over year, said Mary Anne Whitney, Waste Connections’ chief financial officer, during the investor call.
Recycling makes up less than 3% of Waste Connections’ operating revenue. Overall, the company reported total revenue of $1.88 billion during the third quarter, up 18% year over year. Over half of that revenue increase was a result of acquisitions of other companies, however.
Like a couple of the other major haulers, Waste Connections recently published its sustainability report.
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