Republic Services Inc. reported double-digit growth in earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter and stronger net revenue than during the second quarter of 2022.
The Phoenix-based company reported net income of $427.4 million, or $1.35 per diluted share, for the three months ending June 30 versus $371.9 million, or $1.17 per diluted share, for the comparable 2022 period.
Net income for the three months ending June 30 was $446.7 million, or $1.41 per diluted share, versus $418.4 million, or $1.32 per diluted share, for the comparable 2022 period.
“During the second quarter, we delivered double-digit growth in and expanded margins by pricing ahead of cost inflation and growing our business organically,” Republic CEO and President Jon Vander Ark says. “Growth continues to be broad-based, with strong results in our recycling and solid waste and environmental solutions businesses. As a result of our performance and outlook for the remainder of the year, we are raising our full-year financial guidance.”
Full-year guidance adjustments include:
- revenue ranging between $14.775 billion to $14.85 billion;
- adjusted EBITDA between $4.34 billion and $4.36 billion;
- adjusted diluted earnings per share between $5.33 and $5.38; and
- adjusted free cash flow between $1.9 billion and $1.925 billion.
The Phoenix-based company has invested $927 million in acquisitions in the recycling and solid waste space, Vander Ark said during the July 31 second-quarter earnings call.
“The M&A (merger and acquisition) environment remains active with opportunities in both the recycling and Solid Waste and Environmental Solutions businesses,” he says. “We now expect investment in value-creating acquisitions to exceed $1 billion for the year.”
One of those transactions was the acquisition of various GFL assets from Colorado and New Mexico.
While revenue from commodities remains soft overall, Vander Ark says the company is working to expand its end markets for plastics, announcing July 31 a joint venture with Ravago called Blue Polymers.
“Blue Polymers will utilize recycled olefins from our polymer centers to create blended pellets for use in manufacturing sustainable packaging,” Vander Ark says. “We expect to open four facilities beginning in late 2024 with earning contribution beginning in 2026. Development of our polymer centers in Las Vegas and the Midwest remains on track, with the centers becoming operational in late 2023 and late 2024, respectively.”
He says Republic will “participate in the benefit” from the partnership as a 45-percent partner.
As the polymer centers come online during the next several years, Vander Ark says the company’s total recycling volume will subtly shift.
“These polymer centers are built actually to take third-party product over time,” he explained. “So, over time, we’ll flow third-party product in there. That will put more plastic into the system and then dilute the fiber percentage at a certain level, but you’re probably talking more like going from 80 percent (fiber) to 75 percent versus a major change in the mix.”
Other financial highlights include:
- landfill revenue of $823.6 million for the first half of the year, up from $755.6 million through the first half of 2022;
- total collection revenue of $5.001 billion for the first half of 2023, up from about $4.5 billion for the first half of 2022; and
- total revenue for the first half of 7.307 billion compared with about $6.383 billion for the first half of 2022.
