
Image courtesy of Carsten Reisinger - AdobeStock
Waste Connections Inc., Toronto, has released its results for the first quarter of 2022. The company reports a 17.9 percent increase in revenue and a 17.1 percent increase in net income per share.
“We're extremely pleased with our start to the year, particularly given the challenges of record levels of inflation magnified by geopolitical events, ongoing supply chain disruptions and labor constraints as well as the overhang from COVID-related variant impacts,” Worthing F. Jackman, president and CEO of Waste Connections said during a conference call.
Revenue in the first quarter totaled $1.646 billion, up from $1.396 billion in the first quarter of 2021. Operating income was $273.9 million, which included $4.7 million in acquisition-related costs and $1.9 million in impairments and other operating items. This compares with an operating income of $238.4 million in the first quarter of 2021, including $1.5 million in acquisition-related costs. Net income in the first quarter was $180.3 million, or $.69 per share on a diluted basis of 259.6 million shares. In Q1 2021, the company reported a net income of $160.3 million, or $.61 per share on a diluted basis of 263.2 million shares.
Adjusted net income in the first quarter was $213.4 million or 82 cents per diluted share, versus $185.5 million or 70 cents per diluted share, in Q1 2021. Adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) in Q1 was $502.1 million, compared with $433.2 million in Q1 2021. Adjusted net income, adjusted net income per diluted share and adjusted EBITDA, all non-generally accepted accounting principles measures, primarily exclude impairments and acquisition-related items, as reflected in the detailed reconciliations in the attached tables.
“In the first quarter, we delivered solid waste price plus volume growth totaling 7.6 percent,” Jackman says. “The all-in price of 7.1 percent, including about 80 basis points in fuel and material surcharges, marks our highest reported price and ranges from about 4 percent in our most exclusive market Western region, to between 7.5 percent and 8.5 percent in our competitive markets, up 140 basis points sequentially from Q4. Our Q1 pricing was 60 basis points above our outlook and ramp during the quarter as we continue to address the accelerating inflationary headwinds during the period.”
Despite inflation, the company says it achieved underlying margin expansion in solid waste hauling, transfer and disposal. As a result of this, Mary Whitney, the company’s chief financial officer, said the company is well-positioned to meet or exceed our full-year adjusted free cash flow outlook of $1.15 billion provided in February.
The company says it is on track to meet or exceed its full-year adjusted free cash flow outlook of $1.15 billion. The elevated cadence of solid waste acquisition activity has continued with approximately $175 million in annualized revenue year-to-date.
On environmental and production (E&P) waste activity, Waste Connections reported $40.8 million of E&P waste revenue in the first quarter, up 65 percent year-over-year and up 19 percent sequentially from Q4 on a pickup in activity during the quarter from increased drilling as well as remediation jobs primarily in Western Texas.
Looking forward, the company says revenue in Q2 is estimated to be approximately $1.785 billion. This includes solid waste price plus volume growth of 7.5 percent to 8.5 percent.
“Looking ahead to Q2, we expect another sequential increase in both core price and surcharges with all-in price growth exceeding 8 percent,” Jackman said. “Our pricing strength continues to reflect our purposeful approach to addressing the headwinds of inflation and the resilience of our market model, both of which are hallmarks of our strategy.”
Adjusted EBITDA in Q2 is estimated at 31.2 percent of revenue or about $557 million. This reflects an expected 40 basis point margin dilutive impact from acquisitions completed since the prior-year period, implying margins to be flat year-over-year, excluding such impact.
“We believe we are well-positioned for the remainder of 2022 with record solid waste pricing, underlying volume growth, further growth in environmental and production waste and easing cost comparisons,” Jackman said.
Get curated news on YOUR industry.
Enter your email to receive our newsletters.
Latest from Recycling Today
- Buy Scrap Software to showcase its software at Scrap Expo in September
- LG details recycling activities
- Algoma EAF is up and running
- Toyota-Tsusho completes acquisition of Radius Recycling
- CATL, Ellen MacArthur Foundation aim to accelerate circular battery economy
- Commentary: Expanded polystyrene is 98 percent air, 2 percent plastic and 100 percent misunderstood
- AMCS appoints general manager for North America
- How tariffs, regulations affect LIBs recycling in US, EU