GFL reports revenue increase in first quarter

GFL Environmental has reported a 6.5 percent revenue increase excluding the impact of divestitures for the first quarter of 2024 compared to the previous year.

“I am extremely proud of the hard work and commitment of our over 20,000 employees, as we had yet another strong start to the year,” GFL CEO and founder Patrick Dovigi says.

In its earnings report, GFL reported a revenue of $1.8 billion in the first quarter and a solid waste revenue of $1.43 billion, including 7.7 percent from core pricing, partially offset by volume decreases of 3 percent excluding the impact of divestitures.

The Vaughan, Ontario-based company reported an environmental services revenue of $369.6 million, compared to $375.9 million in Q1 of 2023, which included approximately $40 million of revenue associated with an “unseasonably” high level of industrial collection, processing and emergency response activity. The company experienced a facility fire in the fourth quarter of 2023, impacting the environmental services margin by 20 basis points. Excluding the impact of this outsized prior year activity, revenue increased by 10 percent.

Dovigi says the company has invested approximately $500 million in six acquisitions since the beginning of the year.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 10 percent to $455.7 million in the first quarter of 2024, compared to the prior year. The adjusted EBITDA margin was 25.3 percent in the first quarter of 2024, compared to 24.5 percent in the first quarter of 2023. The solid waste adjusted EBITDA margin was 30.8 percent this quarter, compared to 29.2 percent last year, and the environmental services adjusted EBITDA margin remained the same at 22 percent.

GFL reported a net loss of $176.5 million, compared to $217.8 million in the first quarter of 2023.

Adjusted free cash flow was $49.1 million, compared to $50.1 million in 2023. GFL says the increase of $99.2 million was predominantly due to an increase in cash flows from operating activities from improved working capital and a reduction in cash interest paid, as well as timing of capex payments.

“In February, we laid out our comprehensive, transparent guidance for the year and in the first quarter we delivered exactly what we said we would,” Dovigi says. “Consistent with the capital allocation plan that we provided last November, we also completed acquisitions that we expect to contribute approximately $100 million in annualized revenue this year and are deploying capital into incremental growth investments primarily related to RNG [renewable natural gas] and extended producer responsibility [EPR] opportunities.”

Based on its performance in the first quarter, GFL is increasing its previously provided 2024 guidance for adjusted EBITDA from approximately $2.215 billion to approximately $2.23 billion.

Dovigi says the company is confident it will be able to meet or exceed its price guidance for the year, highlighting the recent strength in commodity prices as well as improving employee turnover rates.

GFL was also selected as the preferred recycling vendor for the city of Toronto and is currently in contract negotiations that could be finalized as soon as next quarter. If finalized, the 10-year contract will be worth approximately $50 million per year.