Waste Management blames Europe for slip in results

Click to follow
WASTE Management International, the waste handling company 80 per cent-controlled by WMX Technologies of the US, yesterday reported a dip in taxable profits from pounds 40.1m to pounds 38.9m in the third quarter to 30 September.

The result, on sales up from pounds 221m to pounds 235m, was in line with market estimates. Despite the decline, however, pre-tax profits in the first nine months of the year were up from pounds 102.7m to pounds 110.3m, on sales up 17 per cent to pounds 691m.

The company blamed the setback on difficult trading conditions in Europe and fewer acquisitions than expected. It has made 34 acquisitions in 10 countries, and more are envisaged this quarter.

Despite delays in obtaining landfill permit extensions in Italy, which hit waste volumes, group operating profits in the third quarter rose from pounds 35.4m to pounds 42.8m, boosting margins.

Interest charges, excluding income, almost doubled to pounds 12.4m in the three months, pushing the nine- month bill from pounds 19m to pounds 33.4m. The increase reflected the cost of acquisitions and a heavy investment programme costing about pounds 330m.

Key contracts won this year include a pounds 304m landfill deal won with two partners in Hong Kong, to cover a 13-year period. In Spain, the company obtained a 10-year waste collection and disposal contract worth pounds 142m.

Thanks to a lower tax charge, third-quarter earnings advanced 17 per cent to 19.6p.

Robert Miller-Bakewell, of NatWest Securities, is forecasting taxable profits of pounds 153m for the full year, against pounds 144m in 1992.

The shares rose 9p to 559p.