Haulers report strong Q1, higher commodity prices

Publicly traded recycling collectors saw bale prices rise in the first quarter, contributing to higher revenues and a positive outlook for the year ahead.

North America’s five largest publicly traded garbage and recycling companies, WM, Republic Services, Casella Waste Systems, GFL Environmental and Waste Connections, all recently disclosed their first-quarter 2024 financial results. Compared to prior-year Q1, commodity prices are higher and revenues are up. 

Ronald Mittelstaedt, president and CEO of Waste Connections, said in a press release that 2024 “could be one of our busiest years ever.”

The following are details on recycling-related financial results for the top five publicly traded garbage and recycling companies in the first quarter of 2024:

WM

WM reported a Q1 recycling revenue of $368 million, up 25% year over year. The average commodity price in the first quarter also increased 56% compared to last year, coming in at $84 per ton.

The recycling segment’s first-quarter operating earnings before interest, taxes, depreciation and amortization, or EBITDA, was up $8 million year over year. 

A press release attributed the growth to higher market prices for recycled commodities, but also noted those were partially offset by temporary shutdowns for recycling facility upgrades.

In a statement, Jim Fish, WM president and CEO, said “we outperformed our own high expectations in the first quarter, and what really stands out in our results is our ability to convert more of each revenue dollar to earnings.” 

In its quarterly report, WM noted it continues “to experience margin pressures from our commodity-driven businesses, specifically within our Recycling Processing and Sales and WM Renewable Energy segments.” 

“While still below prices seen at the beginning of 2022, recycling commodity prices began to improve in the fourth quarter of 2023 and continued to improve in the first quarter of 2024,” the company stated. “While there may be short term fluctuations in our commodity-driven businesses as prices change, we continue to take proactive steps to adjust our business models to protect against the down-side risk of changes in commodity prices.”

WM logged slightly more in capital expenditures in Q1 2024, spending $668 million compared to $660 million in Q1 2023. It began operations at its largest upgraded recycling facility in Germantown, Wisconsin in April. 

In an April 25 investors call, Fish noted that WM has another nine facility upgrades scheduled for completion this year and plans to open three new recycling facilities. Downtime for those upgrades is expected to cost about $30 million in lost revenue in 2024. 

Just as in the first quarter of 2023, recycling made up about 7% of WM’s total revenue. Overall, the company reported revenues of $5.2 billion in the first quarter of 2024, up 5.5% year over year. 

By the numbers

The following is a look at key first-quarter 2024 recycling numbers from the five largest publicly traded haulers in North America:

Waste Management

Q1 recycling revenue: $368 million

Q1 revenue change YoY: Up 25%

Average Q1 commodity price: $84 per ton

Commodity price change Yoy: Up 56%

Q1 recycling EBITDA YoY: Up by $8 million

Republic Services

Q1 recycling revenue: $96 million

Q1 revenue change YoY: Up 35%

Average Q1 commodity price (excluding glass and organics): $153 per ton

Commodity price YoY: Up 46%

Casella Waste Systems

Q1 Resource Solutions (which includes recycling) revenue: $75 million

Q1 revenue change YoY: Up 10%

Q1 Resource Solutions operating income: $1.4 million

Operating income YoY: Up by $3.3 million (prior year was loss of $1.9 million)

GFL Environmental (converted to U.S. from Canadian dollars on May 3, 2024)

Q1 recycling revenue: $66 million

Q1 revenue change YoY: Up 8%

Waste Connections

Q1 recycling revenue: $49 million

Q1 revenue change YoY: Up 58%

Average Q1 OCC price: $130 per ton

OCC price YoY: Up 117%

Republic Services

Republic Services reported that its recycling processing and commodity sales revenue was $95.5 million in the first quarter, up about 35% from the year prior. The average commodity price for the first quarter was also up 46%, coming in at $153 per ton. 

“We are off to a strong start to the year and well-positioned to achieve our full-year goals,” Jon Vander Ark, CEO and president, said in a press release.

In its quarterly report, the company noted that recycling processing and commodity sales increased revenue by 0.4% in the first quarter of the year, “primarily due to an increase in overall commodity prices as compared to the same period in 2023.” 

In terms of capital expenditures in waste and recycling specifically, Republic spent $307 million in the Q1 2024, up from $198 million in the same period last year. 

In an April 30 investor’s call, Vander Ark added that the company is using cameras to identify overfill containers and contamination and expects that to reduce contamination in recycling centers, generating about $60 million in incremental annual revenue. To date, Republic is seeing $30 million in annual benefits.

Total revenue in the first quarter 2024 was $3.9 billion, up slightly from $3.6 billion in the same quarter last year. About half of the overall revenue growth is from acquisitions. Recycling made up about 2.5% of the overall company revenue. 

Casella 

Casella’s Resource Solutions segment, which includes recycling and other businesses, reported $75 million in revenue during the first quarter, up 10% from the year before. 

The Resource Solutions segment includes the company’s recycling business, its organics processing and disposal business, and services for large industrial, institutional or multi-site retail customers.

The Resource Solutions segment’s year-over-year increase in revenue was about $700,000. The company’s quarterly report noted that the increases came from higher processing volumes, mostly for recyclables, providing a year-over-year increase of $400,000; better results in the National Accounts business providing a $2.7 million increase; and acquisitions and other factors. 

However, those gains were partially offset by lower National Accounts business volumes of $1.8 million, lower tipping fees and other processing pricing of $1.3 million and lower surcharges and fees associated with the National Accounts business, among other factors. 

The company also discloses operating income in the Resource Solutions business. For the first quarter, the Resource Solutions segment’s operating income was $1.4 million. During the first quarter of 2023, the operating income in that segment was a loss of $1.9 million. 

In an April 26 investor’s call, John Casella, CEO, noted that while improvement in recycling commodity prices was a tailwind, the company experienced a greater contribution in the quarter from its upgraded Boston MRF, which “is firing on all cylinders.”

“On an overall basis, whether it be full upgrade of the processing equipment or selectively replacing certain pieces of equipment, we are constantly looking for ways to improve our operating efficiencies, better end product quality and enhanced recovery across our sustainability infrastructure, while generating solid returns,” he added. 

Based on the success of the Boston upgrades, Casella is moving ahead on modernizing its Willimantic, Connecticut, MRF later this year, Casella noted. 

Overall, the company brought in $341 million in revenue, up 30% year over year. The Resource Solutions segment made up about 22% of overall revenues in the first quarter of 2024. 

GFL Environmental

Canadian company GFL Environmental’s recycling segment brought in 90.2 million Canadian dollars (about $66 million; all subsequent values in USD) in revenue in Q1 2024. 

Its quarterly report noted that revenue was up about 8% year over year.

In a May 2 investor’s call, CEO and founder Patrick Dovigi said “with the strength of our first quarter pricing, we are highly confident that we will be able to meet or exceed our price guidance for the year.” 

He added that as extended producer responsibility continues to roll out in Canada, GFL expects to see a financial benefit. The company was recently selected as a preferred recycling vendor for the city of Toronto and is currently in contract negotiations to finalize it, Dovigi said. 

That 10-year contact would bring in about $50 million in revenue per year, Dovigi added, as GFL already services about 60% of the city. 

“As we look at the other provinces, Quebec and the Maritimes continue to release incremental bids and legislation continues to go through in Western Canada,” he noted. 

Overall, the company reported revenue of $1.3 billion in the first quarter of 2024, an increase of 6.5% year over year. Materials recovery makes up about 5% of GFL’s overall revenue. 

Waste Connections 

For Waste Connections, recycling revenue in Q1 2024 was $49 million, up 58% from the same period of 2023. 

Its quarterly report attributed the increase to “higher average commodity pricing for old corrugated cardboard, plastics and other paper products.”

The average Q1 OCC price was $130 per ton, up from $60 per ton in the same period last year, the company shared in an April 25 investor’s call.  

Mittelstaedt said in a statement that the strong start to the year is “driving better than expected operating and financial results, which, along with recently completed acquisitions, positions us well for the remainder of 2024.” 

“Continuing improvements in employee retention and safety trends, along with rising commodity values, provide momentum for continued outperformance,” he added. 

The company acquired nine non-hazardous solid waste collection, transfer, recycling and disposal businesses in the first quarter of the year. 

Overall, Waste Connections enjoyed a Q1 2024 revenue of $2 billion, up 9.1% year over year. Recycling makes up about 2.3% of its total revenue.