Waste Management full-year profit climbs 20pc

Listed landfill and waste collection company, Waste Management Ltd, today posted a 20 per cent rise in full-year profit.

The company, which has operations in New Zealand and across the Tasman, posted a net after-tax profit of $30.7 million for the year to December 31, compared with $25.6m a year earlier.

Total operating revenue rose 18 per cent to $252m.

Shares in Waste Management, which declared a fully imputed dividend of 15.8c per share, last traded on Friday at $6.40, against a year high of $6.80.

Today's result was in line with guidance giv en by Waste Management at its first half result.

It was buoyed by acquisitions in New Zealand and strong performances by the company's Australian divisions.

Earnings before interest, tax, depreciation and amortisation (ebitda) at its Australian division rose 78 per cent over the year.

Waste Management -- whose Australian operations centre around Adelaide, Brisbane and Melbourne -- last year indicated it planned to expand the Australian business and was interested in buying the Cleanaway business from Anglo-Australian group Brambles.

"The board is satisfied that our structure in Australia is appropriate, that the spread of companies we operate in Australia is well managed and that we are continuing to gather momentum," Waste Management said.

New Zealand continued to be the mainstay, however.

During the year there was a major shake-up in the Auckland market, with a key competitor closing its inner-city landfill.

That saw prices at Waste Management's Redvale and Whitford landfills rise .

It also meant that the company's Whitford landfill was now the only inner-city landfill in Auckland, with a license to operate until 2014.

The two landfills also boosted revenue during the period from the production of electricity from methane gas.

Redvale added another generator during the year, taking its tally to five, and -- with power prices strong -- electricity revenue rose by 50 per cent at Redvale and more than doubled at Whitford.

The increased capacity meant the company could now provide enough energy to power 10,000 homes.

Waste Management began operating Whangarei District Council's refuse transfer station during the year at their new Resource Recovery Park, under a five-year contract.

Acquisitions in New Zealand included Onyx Auckland, Bin Shifters, Ring-A-Bin and Te Awamutu Bin Hire.

These amounted to a total investment of $4.7m and were delivering "excellent returns".

Since balance date, Waste Management acquired the residual Onyx business in New Plymouth, Wellington and Christchurch, and Parkes in Whangarei, for a combined $4.1m.

In the South Island, the Kate Valley landfill in Canterbury was now completed and had been operating since June 2005.

Waste Management said it was working towards complying with new international financial reporting standards. The 2005 result, restated for IFRS, would likely be around $37.5m, an increase of 22 per cent on the same period a year earlier.

Looking ahead, Waste Management was still on the acquisition trail, with plans to buy Tauranga-based Environmental Green Bins in August.

The company said it had "a range of transactions" in its sights in Australia and New Zealand.

"Notwithstanding slowing economies in Australia and New Zealand over the next year, we remain confident that we will once again grow our earnings," Waste Management said.

- NZPA