Renewi PLC Half Year Trading update (2161O)
October 01 2019 - 2:00AM
UK Regulatory
TIDMRWI
RNS Number : 2161O
Renewi PLC
01 October 2019
This announcement contains inside information
1 October 2019
Renewi plc
("Renewi", the "Company" or, together with its subsidiaries, the
"Group")
Half Year Trading update
Renewi plc (LSE: RWI), the international waste-to-product
business, announces its trading update for the period from 1 April
2019 to date. This update is released in advance of the Group's
half year results for the six months ended 30 September 2019, which
will be issued on 7 November 2019.
Trading
Trading has been in line with the Board's expectations. The
Commercial Division has continued to benefit from price increases
and synergies which have more than offset cost inflation, lower
paper prices and a modest slowdown in volumes. The unplanned
shutdown of the AEB incinerator in Amsterdam is expected to have
little impact on the Group's performance. Renewi has been able to
create buffer capacity and has contracted alternative incineration
and landfill capacity for the remainder of the year. AEB is
contractually liable to compensate us for costs incurred and we are
in the process of recovering these in full.
The Hazardous Waste Division has made good progress both in
testing soil stocks and in scaling-up the new process to
manufacture building materials from soil. Soil testing, according
to a protocol agreed with the regulators, is now complete and has
confirmed that ATM's current stock production does not contain any
substances at levels which prevent its use. We are therefore
discussing with the regulators how and when the market can be
re-opened. Customer trials of our new building materials have
generated positive feedback. We expect product certification by the
end of the current financial year. New equipment currently being
installed is expected to increase capacity to over 600,000 tonnes
of building materials per year, over 50% of ATM's potential output,
from early 2020.
The Monostreams and Municipal Divisions have performed in line
with the Board's expectations. The long-term PPP contract with the
Councils of Derby and Derbyshire has been terminated, as provided
for at 31 March 2019. We have now entered into a Continuity
Services contract directly with the Councils. This contract is a
services contract and will not require the injection of any capital
by Renewi.
Cash performance has been in line with expectations.
Balance sheet
We have progressed our previously announced projects to reduce
debt and leverage.
On 17 June, we signed an agreement to sell our Canadian
Municipal business for up to CAD107.5m (approximately EUR72m) to
Convent Capital. The transaction closed on 30 September 2019 and
the initial CAD82m has been received.
On 5 July, we completed the subscription of a EUR75m Green
Belgian retail bond at a coupon of 3%. This completed our
conversion to becoming completely Green funded from the bonds, the
EU Private Placement (EUPP), Term Loan and Revolving Credit
Facility. This bond replaced a EUR100m bond that was redeemed at
the end of July.
On 16 September, we signed an agreement to sell our Reym
Industrial Cleaning businesses for EUR50m in cash to REMONDIS
Maintenance & Services. The transaction is subject to
competition clearance and is expected to close by November
2019.
The proceeds from our disposals and the new Green retail bond,
together with the EUR25m Green EUPP issued last December, ensure
that the Group has significant long-term headroom on its borrowing
facilities.
Outlook
The Board's expectations for the year ending 31 March 2020
remain unchanged with an ongoing focus on cash and driving leverage
down over time. All of our divisions are on track and we are
increasingly confident that we will be able to increase production
at ATM during 2020.
For further information:
========================= ==================
FTI Consulting Renewi plc
+44 20 3727 1340 www.renewiplc.com
Richard Mountain
========================= ==================
About Renewi
Renewi is a leading waste to product company that gives new life
to used materials every day. We have more than 7,000 employees
working at 189 operating sites across Europe and North America. Our
extensive operational network means we are always close to our
customers.
For Renewi, waste is a state of mind, and an opportunity. Our
many years of knowledge and experience, combined with a broad range
of services, allow us to offer sustainable, practical recycling
solutions. We use innovation and the latest technology to turn
waste into useful materials such as paper, metal, plastic, glass,
wood, building materials, compost and energy. In other words, we
turn today's waste into tomorrow's raw materials.
The result of our work is less waste and contamination, a
smarter use of scarce raw materials, and a reduction in carbon
emissions. This means that we are contributing towards a cleaner,
circular world in which we "waste no more".
Visit our website for more information: www.renewiplc.com.
Images are available at www.renewiplc.com/imagelibrary.
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END
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