Waste Management lifts half year net profit 16pc

Waste Management said today its June half year net profit rose 16 per cent to $14.8 million.

It forecast a similar rise in its annual profit despite a "challenging" Australian market.

"The economic outlook in both countries appears to be less optimistic and the Australian market continues to provide many challenges for the company," Waste Management said in a statement to the stock exchange.

The directors said they had factored this into their thinking and anticipated a net surplus in the vicinity of $30m for the full year.

They declared an interim dividend of 15.0 cents per share to be paid on September 2 -- up 51 per cent on last year's 9.9c.

The rise is in line with the dividend policy introduced earlier this year of distributing 75 per cent of operating surplus after taxation, plus 100 per cent of goodwill amortisation,

Operating revenue rose 18 per cent in the half year to $119.9m and the pre-tax operating surplus rose 16.5 per cent to $24m.

Earnings per share rose to 14.8c from 12.9c.

The result included the recognition of non-recurring items amounting to $1.2m after tax.

Operating cash flows increased from $26.3m to $30.7m.

The New Zealand division had a strong performance from its disposal division that saw revenue grow 27 per cent and pre-tax earnings grow 31 per cent.

The collection division also performed well with revenue and earnings growth in all branches.

Increased power generation capacity at Waste Management's Redvale and Whitford tips and higher prices, resulted in an increase in power generation revenue and profitability. The two landfills generators produce 7 megawatts of power per hour.

Canterbury Waste Services (CWS) had completed construction of the new regional landfill at Kate Valley, on time and on budget. CWS is a 50 per cent shareholder in Transwaste Canterbury Ltd which owns the landfill.

In Australia, operation of the Inkerman landfill and Wingfield resource recovery and waste transfer station in South Australia commenced January 1.

Chief executive Kim Ellis said it was early days yet with the market being highly competitive as it adjusted to a new regime of private sector ownership.

"Volumes and pricing need to improve but directors are confident that a number of opportunities have been identified to ensure the project will achieve the desired return."

The dry waste collection businesses in Adelaide and Melbourne performed well with improving margins, Mr Ellis said.

Waste Management shares were unchanged on $6.78 shortly after the announcements. The stock has traded between $4.75 and $6.80 in the last year.

- NZPA