26th Mar 2020 10:20
(Alliance News) - Waste-to-products firm Renewi PLC on Thursday said it will meet its full-year expectations having only just experienced lower volumes due to the Covid-19 outbreak.
But the company expects to be hurt by the economic effects of the pandemic during the next financial year, and has decided against paying a final dividend.
Renewi, which ends its financial year on March 31, said its Commercial division traded "broadly as expected", with some of its other units beating expectations.
Waste treatment unit ATM has made "encouraging progress" and production is expected to increase progressively in the next financial year.
Renewi added that it has implemented a "full range of measures" in a bid to mitigate the negative impact from Covid-19.
Renewi explained: "We are tracking incoming volumes and other leading indicators daily. Volumes have only just begun to reduce and so there is expected to be little impact on our March results. We do expect a negative impact next year: the extent will depend on the duration and severity of the measures."
Cost-cutting measures include not paying a final dividend for the current financial year and reducing capital expenditure.
"These initial actions are expected to save over EUR40 million during the next financial year," Renewi added.
The company also explained that the European Commission will probe whether the Walloon region provided Renewi with state aid at its Cetem landfill site.
"An adverse judgement would require the Walloon Region to seek repayment from Renewi and we will support their vigorous defence of the EC case. Judgement typically takes three years followed by appeal and any subsequent contested claim against Renewi," the company noted.
Renewi explained it set aside a provision of EUR15 million in relation to the probe.
Shares in the company were 1.1% higher at 23.05 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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