Covanta Releases Second Quarter Earnings Following Acquisition

Covanta saw a 11.4% revenue increase in the second quarter, 2021 driven by growth in "nearly all areas," according to the company.

Second quarter earnings results were released just two weeks after the announcement that global investment organization EQT group acquired the waste-to-energy company for $5.3 billion.

Revenues reached $506 million in Q2 2021, up from $454 million in 2020, or $52 million from the prior year.

New Jersey-based Covanta, which holds about 75% market share in the WTE sector, experienced $27 million growth in waste revenue growth.

Tip fees increased 7% in Q2, up $11 million due to higher prices. Higher plant throughput caused service fees to grow $8 million, up 7% year over year (YOY). A strong rebound in Covanta's environmental services business drove material processing and recycling revenue to increase $8 million. Energy revenues and material sales also rose by $8 million and $18 million, respectively.

The company's total operating expenses were $481 million in Q2 2021, up $45 million YOY, driven by increases in wages and benefits, maintenance expenses, general and administrative expenses and higher costs due to hauling, disposal chemicals and reagents.

Second-quarter Adjusted EBITDA was $110 million, up $14 million from $96 million the prior year. The company attributed this to higher waste and commodity prices that were "partially offset by higher costs compared to the prior year cost mitigation program and heavier planned maintenance expense."

Free Cash Flow was "effectively unchanged" YOY at $62 million. Planned maintenance capital expenditures offset the higher adjust EBITDA, according to the company.

Finally, net debt outstanding was $2.5 billion with a leverage ratio of 5.8x.