Cleanaway (ASX:CWY) share price sinks 4% as NSW lockdowns bite

Lockdowns are hitting this waste management company’s profits…
The post Cleanaway (ASX:CWY) share price sinks 4% as NSW lockdowns bite appeared first on The Motley Fool Australia. –

The Cleanaway Waste Management Ltd (ASX: CWY) share price is under pressure on Friday following the release of its full year results.

In early trade, the waste management company’s shares are down 4% to $2.46

Cleanaway share price falls on soft FY 2022 outlook

Revenue increased 4.7% to $2.2 billion
EBITDA rose 3.8% to $535.1 million
Operating cash flow up 5.7% to $424.4 million
Underlying net profit after tax increased 2.1% to $153.2 million
Final dividend up 11.9% to 2.35 cents per share, bringing full year dividend to 4.6 cents per share
FY 2022 outlook: NSW lockdowns having negative ~$4 million EBITDA monthly impact

What happened in FY 2021 for Cleanaway?

For the 12 months ended 30 June, Cleanaway reported a 4.7% increase in revenue to $2.2 billion and a 2.1% lift in underlying net profit after tax to $153.2 million. This was driven largely by the company’s Solid Waste Services business, which recorded a 7.5% increase in revenue to $1,476.3 million and a 4.4% increase in EBITDA to $405.5 million

Management advised that this reflects full year contributions from Statewide Recycling and the VCRR businesses (former SKM assets) and initial contributions from and Stawell landfill, Grasshopper Environmental (NSW C&D collections), and the Pinkenba Recycling acquisitions. This was offset slightly by lower post collections volumes at the Erskine Park inert landfill in Sydney. This was due to delays in work being undertaken to construct a mechanically stabilised earth (MSE) wall.

What did management say?

Cleanaway’s Chief Operating Officer, Brendan Gill, commented “In what has been a challenging operating environment I am pleased with the way our business and our people have responded to deliver a strong set of financial results. This once again reflects the diversification of our customer base and service offerings.”

“FY21 presented ongoing challenges and disruption caused by the COVID-19 pandemic and severe weather events. Some regions were more affected than others and we adapted how we work and operate to ensure we could continually service the needs of our customers and the community.”

“The defensive characteristics of our revenue streams continue to underpin our financial performance. Each of our three operating segments grew their earnings during the year,” he added.

What’s next for Cleanaway?

The company’s outlook statement appears to be weighing on the Cleanaway share price today.

It advised that heading into FY 2022 there was strong underlying momentum in the business. As such, it was expecting to grow its earnings had COVID-19 impacts been broadly similar to FY 2021.

However, it notes that the duration and nature of the current NSW lockdowns and potential medium-term implications on economic activity is more severe than in FY 2021.

So much so, under the current policy settings, restrictions in NSW are estimated to be having a ~$4 million EBITDA negative monthly impact. This is primarily as a result of closure of the bulk of the NSW Container Deposit Scheme, restrictions on construction activity, and weakness in the C&I market.

The company intends to provide a trading update at its annual general meeting in October.

The post Cleanaway (ASX:CWY) share price sinks 4% as NSW lockdowns bite appeared first on The Motley Fool Australia.

Should you invest $1,000 in Cleanaway right now?

Before you consider Cleanaway, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Cleanaway wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Redbubble (ASX:RBL) share price jumps 12% after broker upgrade
Stockland (ASX:SGP) share price rises on strong sales growth in FY21 earnings
Adairs (ASX:ADH) share price surges 9% on record FY21 result
Smartgroup (ASX:SIQ) share price jumps on $26.5 million profit
When was the worst-ever day on the AGL (ASX:AGL) share price chart?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!