While publicly traded waste and recycling companies had generally positive years in 2014, annual financial reports show falling commodity prices are expected to cause trouble in 2015.
Casella Waste Systems
Casella Waste Systems, which reported on the last eight months of 2014, grabbed revenues of $368.37 million. Casella’s recycling business accounted for 9.2 percent of the sum, generating $33.74 million and rising from 2013’s $29.31 million.
John Casella, chairman and CEO of the company, stressed recycled commodity prices were an ongoing concern.
“Since late 2014 and into early 2015, recycling commodity prices have continued to decline, with the average commodity revenue per ton down roughly 25 percent since October 2014,” Casella reported. “We believe that these declines in recycling commodity prices are not short-lived, but rather reflect changing international markets for recycled commodity products, including lower demand from the Chinese markets due to slower economic growth and growth in the Chinese domestic markets.”
To account for those challenges, Casella has increased tipping fees and collection charges in 2015.
The company’s stock fell 30 percent in 2014, ending the year at $4.04 after closing 2013 at $5.80 per share.
Progressive Waste Solutions
Progressive Waste Solutions announced overall revenues in 2014 totaled just over $2 billion and were slightly down from 2013 revenues. For the year, Progressive notched $63.65 million in recycling revenues, up from $59.86 million in 2013 and accounting for 3.2 percent of overall revenues.
On 2015, the company’s CEO and president, Joseph Quarin, noted “the current softness in recycled commodity prices” could have an impact on earnings for the year.
During 2014, Progressive’s stock price rose 21.5 percent to $30.08 per share.
Republic Services generated $8.79 billion in revenues in 2014. That’s up from 2013 totals of $8.42 billion, the company said.
Sales of recycled commodities, meanwhile, totaled $390.80 million, 4.4 percent of total revenues. In 2013, recycled commodity sales were slightly lower, coming in at $374.60 million. The company only reports on sales of recycled commodities, choosing not to break down specifics on recycling operations as a whole.
The company expects 2015 revenues to climb 2.5 to 3.5 percent, despite anticipated setbacks in the recycled commodity arena.
Republic’s stock increased in value by 21.24 percent in 2014, coming in at $40.25 per share on Dec. 31, 2014.
Waste Connections reported $2.08 billion in revenues for the year. Up from 2013’s $1.93 billion, 2014 revenues were aided by $56.11 million in recycling revenues, making up 2.7 percent of total revenues.
Looking ahead, Waste Connections also sees recycled commodity prices as a potential issue, stating: “Fluctuations in prices for recycled commodities that we sell and rebates we offer to customers may cause our revenues and operating results to decline.” The company is targeting revenues in 2015 of $2.15 billion.
Waste Connection’s stock price for the year was essentially flat, increasing by less than one percentage point and finishing 2014 at $43.99 per share.
With nearly $14 billion in revenues for the year, Waste Management announced about $1.37 billion in revenues, or about 10 percent of the total, came from its recycling business. Recycling revenues in 2013 totaled $1.45 billion.
Recycled commodity prices were signaled as a major driver for holding recycling revenues back.
“Recycling operations improvements are not expected to keep pace with recent recycling commodity price declines,” the company stated.
In 2014, WM’s stock jumped 14.38 percent, reaching $51.32.