In light of a strong second quarter, Waste Connections, in Woodbridge, Ont., raised its expectations for the remainder of 2022, according to its second quarter financial report.
Second quarter net income was $257.1 million, an increase of nearly 22% over last year’s net income of $210.9 million for the same period.
“Solid waste price growth of 8.8% enabled us to overcome increased inflationary pressures during the period and generate adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] margin in line with our outlook for the second quarter and stable year-over-year, excluding the dilutive impact on margin from acquisitions completed since last year,” said the President and Chief Executive Officer. management of Waste Connections, Worthing F. Jackman.
According to the company’s filing with the federal Securities and Exchange Commission, its net income increased approximately 26.5% in the second quarter of 2022 (approximately $224 million) compared to 2021 (approximately $177 million). dollars).
Revenue for the quarter was approximately $1.81 billion, up 18.4% from Waste Connections’ $1.53 billion introduced in the second quarter of 2021.
For the second quarter of 22, Waste Connections adjusted EBIDTA was approximately $566.8 million, compared to approximately $485 million for the second quarter of 2021, an increase of approximately 16.9%, according to the company’s filing with the SEC.
The updated outlook for the rest of 2022 includes a revised annual revenue projection of $7.125 billion, up $215 million from a previous estimate, said Waste Connections’ chief financial officer and executive vice president. , Mary Anne Whitney.
“Adjusted EBITDA for the full year is now estimated to be approximately $2.19 billion, or approximately 30.7% of revenue, down approximately 50 basis points from our initial outlook as follows: 40 basis points reflect the impact of further price increases to overcome higher inflationary pressures, including more than 100 basis points from higher fuel and third-party logistics compared to our outlook initial, and 10 basis points comes from the dilutive impact on the margin of the acquisitions made since February,” said Whitney.
High prices coupled with fuel surcharges helped shield the company from inflationary pressures, Jackman says.
“We are extremely pleased with our performance in the first half of the year, driven by strong execution and continued pricing implementations to address macro challenges,” he said. “In the second quarter, as cost pressures persisted, we once again offered pricing above our guidance, and positioned ourselves for another sequential increase in the third quarter to drive up pricing in the second half. of the year.”
The first half of 2022 has also been marked by strong acquisition activity, which Jackman says should help boost revenue.
“We have already completed 12 acquisitions year-to-date, with annualized revenue of approximately $245 million, about twice the level of what we would consider average for a full year,” says -he. “These transactions are all in solid waste and include West Coast franchises, as well as new market entries and add-ons spread across competitive markets in the United States and Canada.”
According to the SEC filing, Waste Connections carries approximately $5.6 billion in long-term debt, issued in the form of notes maturing between 2028 and 2052. Interest rates on these notes range from 2.2% at 4.25%.