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Covanta Holding’s Revenues Rise for the First Time in 3 Years

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Waste and service revenues

After remaining stagnant for three years, Covanta Holding Corporation’s (CVA) waste and services revenues increased by $24 million, or about 2.4%, to $1.032 billion in fiscal 2014. A $17 million revenue loss due to expired contracts was more than offset by a $14 million increase in same-store revenues, or revenues from contracts running for at least one year, and an $8 million increase in revenues from new contracts. Republic Services (RSG) and Waste Connections (WCN) reported higher waste collection revenues during the year. Waste Management’s (WM) collection revenues remained flat.

Covanta’s waste and services revenues from non-EfW (energy-from-waste) projects increased by $18 million, as new waste transfer stations acquired by the company in late 2013 contributed to revenues.

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Energy revenues

Covanta Holding Corporation’s (CVA) energy revenues have grown for the second straight year. Energy revenues came in at $460 million in fiscal 2014, $29 million more than the previous year. Higher energy prices during 1Q14 due to unusually cold weather and higher electricity production resulted in the increase in energy revenues. The Tongxing facility in China reported an increase of $8 million in steam revenues.

Recycled metals

Covanta’s revenues in the metals segment rose by $20 million to $93 million in fiscal 2014, primarily due to a higher volume of metals recovered in the recycling process. The company sold a total of 370 tons of recovered metals in fiscal 2014, 39 tons more than it did in fiscal 2013. Note that the energy and metals revenues represent only Covanta’s share. CVA is part of the iShares Russell 1000 Value ETF (IWD).

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