Waste Management posts 10 pc increase in earnings

Photo / APN

Waste Management NZ, which is up for sale, posted a 10.6 per cent increase in operating earnings for the first half to December 31, its Australian parent company, Transpacific Industries, said.

The New Zealand company's revenue for the six months was up 8.1 per cent at $182.4 million and its earnings before interest, tax depreciation and amortisation came to $46.1m, up from $41.7m a year earlier.

Transpacific said new Auckland municipal contracts started last July and that the Christchurch rebuild had gained momentum with an increase in housing starts.

The company said there had been sold growth in landfill volumes in New Zealand and that it had expanded its position in Wellington.

The once-troubled parent company reported a statutory profit after tax of A$158.6 million for the six months, up from A$32.3 million in the previous corresponding period.

The number included a number of significant items totalling A$116.9 million, with the major component being the gain on sale of the Commercial Vehicles Group which was sold in August last year.

Transpacific said Australian market conditions remained subdued during the period but that trading conditions in the Auckland and Christchurch regions of New Zealand had improved.

The process of selling the New Zealand operation is going down a so-called "dual track", with a trade sale being actively weighed up against the option of an initial public offer and float.

A trade sale to a private equity company or infrastructure specialist such as Infratil was likely to offer the cleanest exit for the parent company, but a listing on both sides of the Tasman was also seen as having merit.

Waste Management, the headed up by Kim Ellis, was highly profitable before it was taken over by Transpacific for $870 million in 2006.

The New Zealand entity now has more than 200,000 customers and 800 trucks. Landfills are an important part of the business. Among the seven major landfills nationwide, Transpacific's Waste Management has five.

The other major player is Envirowaste, which was sold last year.