WM maintains profitable operations

WM has reported increases in net income and revenue in this year’s third quarter compared with the third quarter of 2022.

The Houston-based company’s $5.2 billion in revenue is up by 2.37 percent year on year, while its net income of $663 million represents 3.75 percent year-on-year growth.

“Over the course of the year, our team has consistently delivered strong results driven by our focus on pricing discipline and optimization of our cost structure,” WM President and CEO Jim Fish says.

“In the third quarter, organic growth in our collection and disposal business, operating cost improvements and our commitment to selling, general and administrative [SG&A] cost management translated into more than 6 percent growth in adjusted operating earnings before interest taxes, depreciation and amortization [EBITDA] and 100 basis points of adjusted operating EBITDA margin expansion.”

WM has reported a collection and disposal yield figure of 5 percent for this year’s third quarter compared with 7.1 yield in the third quarter of 2022.

The company, in splitting up its third-quarter operating EBITDA among three major segments, says that figure in its collection and disposal business increased by approximately $105 million for a total of $1.7 billion in this year’s third quarter and represented 32.6 percent of the WM’s total.

Operating EBITDA in WM’s recycling line of business, however, declined by $10 million compared with the third quarter of 2022, which WM says was in line with its expectations. “The decline was driven by the approximately 40 percent decrease in market prices for single-stream recycled commodities,” according to the company.

WM says its material recovery facilities (MRFs) continue to see strong improvements in product quality, throughput and labor costs, which are mitigating the commodity price pressure on earnings.

In the third sector broken out, WM’s renewable energy business operating EBITDA declined by $13 million compared with the third quarter of 2022. WM says that result also was in line with expectations and was primarily driven by decreases in the value of energy prices and renewable fuel standard credits.

Despite the tempered earnings in the recycling and renewables sectors, WM says it continues to advance its sustainability growth investments in both the renewable energy and recycling businesses.

In the third quarter, technology and automation upgrades were completed at two of WM’s recycling facilities, and another two automation projects and a new market facility are expected to be in service by the end of the year. WM also says it expects to have its seventh renewable natural gas facility in service next January.

“We are pleased with our results in the initial three quarters of the year across all key financial metrics, giving us confidence in our ability to deliver on the guidance we communicated in July,” Fish says. “Our team remains focused on continuing to drive operating leverage in the business to deliver a strong finish to this year and lay the groundwork for further growth in 2024.”