Waste Management (WM), Houston, has announced its financial results for the second quarter, which ended June 30. During the quarter, WM saw growth due to the economy’s recovery from the pandemic, says Jim Fish, CEO of WM.
“In the second quarter, adjusted operating earnings before interest, taxes, depreciation and amortization (EBITDA) grew 28 percent. Adjusted operating EBITDA margin expanded 50 basis points, and we generated more than $1 billion of cash from operations,” Fish says. “We continue to execute on our pricing programs and efficiently manage our costs as volumes return.”
According to a news release from WM, in the second quarter, revenue increased $425 million in the company’s collection and disposal business, when excluding the impact of acquisitions and divestitures. This is compared with the second quarter of 2020, driven by $307 million in volume increases and $118 million in growth from yield.
The company also reported a $305 million increase in revenue from the acquisition of Advanced Disposal, Ponte Vedra, Florida.
Operating EBITDA in the company’s collection and disposal business, adjusted on the same basis as a total company operating EBITDA, was $1.41 billion, or 32 percent of revenue, for the second quarter of 2021. This is compared with $1.14 billion, or 32.1 percent of revenue, for the second quarter of 2020.
The company says operating EBITDA for its recycling and renewable energy lines of business has improved by $14 million and $20 million, respectively.
Expenditures in 2021 were $396 million compared with $436 million in the second quarter of 2020. Free cash flow was $649 million compared to $423 million in the second quarter of 2020.
During the second quarter of 2021, $492 million was returned to shareholders, including $242 million of cash dividends and $250 million of share repurchases.
Moving forward, the company says it is projecting total company revenue growth to be 15.5 percent to 16 percent in 2021. Combined internal revenue growth from yield and volume in the collection and disposal business is expected to be 5.5 percent or greater. Adjusted operating EBITDA is expected to be between $5 billion and $5.1 billion and free cash flow is projected to be between $2.5 billion and $2.6 billion in 2021.
The company says it is on target to capture between $80 million and $85 million in cost synergies in 2021 from the acquisition of Advanced Disposal, which is on track to achieve $150 million in total annual run-rate synergies from cost and capital savings.
“Strong performance across all of our businesses—collection and disposal, recycling and renewable energy—generated outstanding results so far this year,” Fish says. “Our focus on disciplined pricing and cost management helped to offset the inflationary cost pressures we have seen, and we expect to continue this focus into the second half of the year to help us deliver on our new, higher outlook. I want to thank each of our team members for their contributions to our success.”