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Analysis of the Waste Management Area

The Waste Management area is one that has suffered most the effects of general economic crisis, nevertheless it showed a slight increase in margin compared to 2008, as illustrated in the table below

(mln/€)31-Dec-200831-Dec-2009Abs. Change%Change
Area EBITDA186.3187.3+1.0+0.5%
Group EBITDA528.3567.3+39.0+7.4%
Percentage weight35.3%33.0%-2.3 p.p. 

The Hera Group is reconfirmed as the most important integrated operator in the sector at European level, due to the fact that it has 77 treatment and disposal plants for urban and special waste.

The Group operates through 7 ATO’s in the provinces of Ravenna, Forlì-Cesena, Rimini, Bologna, Ferrara Modena and Pesaro-Urbino in the area of urban waste management services including, sweeping, collection and disposal of urban waste, as for the water cycle services. With all agencies, agreements compliant with current regulations are in operation.

An analysis of the operating results achieved in the Waste Management area is shown below:

Income statement (millions of €)31-dic-08% Inc.31-Dec-2009% Inc.Abs. Change % Change
Revenues632.1 642.4 +10.3+1.6%
Operating costs(328.0)-51.9%(327.3)-50.9%-0.7-0.2%
Personnel costs(142.1)-22.5%(142.4)-22.2%+0.3+0.2%
Capitalised costs24.23.8%14.52.3%-9.7-40.0%
EBITDA186.329.5%187.329.2%+1.0+0.5%

Revenues as at the end of 2009 show an increase of 1.6%, from Euro 632.1 million in 2008 to 642.4 in the same period this year, linked to higher revenues in the Urban waste management service, derived from tariff  adjustments obtained to cover the extra services required, and partially offset by lower volumes of special waste treated.

Separate waste collection, as a percentage of total volume of waste collected, reached at the  end of 2009 a value of 44.8%, against 42.1% for the year 2008, up 2.7 percentage points.

The following table shows the decline in the quantity of waste disposed, which have fallen by 2.6% on the year 2008:

Quantitative data (thousand tonnes)31-Dec-2008% Inc.31-Dec-2009% Inc.Abs. Change% Change
Urban waste1,762.534.2%1,793.935.1%+31.4+1.8%
Market waste1,650.732.0%1,530.829.9%-119.9-7.3%
Commercialized waste3,413.266.2%3,324.765.0%-88.5-2.6%
Special waste from plant by-products1,745.033.8%1,790.235.0%+45.2+2.6%
Waste treated by type5,158.2100.0%5,114.8100.0%-43.4-0.8%
Landfills1,597.831.0%1,400.427.4%-197.4-12.4%
Waste to energy plants622.412.1%734.514.4%+112.1+18.0%
Selection plants343.96.7%290.65.7%-53.3-15.5%
Compost plants352.26.8%402.07.9%+49.8+14.1%
Stabilisation and chemical-phys. plants1,057.920.5%1,084.621.2%+26.7+2.5%
Other1,184.023.0%1,202.723.5%+18.7+1.6%
Waste treated by plant5,158.2100.0%5,114.8100.0%-43.4-0.8%

Analysis of quantitative data reveals an increase of urban waste related to the increase of population served, and a decrease in market waste due to economic hardship. It also shows a sharp reduction in use of landfills in favour of incineration plants, composting and stabilisation, also thanks to the full operation of the new plants in Ferrara and Forli, and the start-up of Modena’s.

The waste type treatment classification in 2008 was changed due to the creation of the HERAmbiente company, inasmuch as the waste management flows within the company and its subsidiaries have been redesigned.

In conclusion, Waste Management results are positively influenced by the contribution of new plants and by the additional services provided; conversely, it has been negatively impacting by the effects of the economic crisis that resulted in a decrease in the volume of special waste treated and of the prices for material set for recovery through separate waste collection.

The EBITDA of the Waste Management area increased from Euro 186.3 million in 2008 to Euro 187.3 in the corresponding period of 2009, up by 0.5%.

 
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