Cleanaway (ASX:CWY) lowers EBITDA guidance for FY22, shares fall

3 min read | May 03, 2022 12:57 PM AEST | By Ritwika

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Cleanaway (ASX:CWY) lowers EBITDA guidance for FY22, shares fall — Image source: © Vchalup | Megapixl.com

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Highlights:

Cleanaway will continue to face COVID-19 impacts during the remaining FY22.

The company will also see the impacts of higher fuel prices and the consequences of the flood.

As a result, the company will deliver a lesser EBITDA than stated before.

The shares of Cleanaway Waste Management Limited (ASX:CWY) were spotted trading 3.492% lower at AU$3.04 per share at 10:51 AM AEST on the ASX today (3 May). Approximately 2.6 million shares of Cleanaway were traded after ASX opened for trading on Tuesday morning.

The ASX-listed waste management solution provider announced today that it expects its H2 FY22 performance is likely to get impacted by higher fuel and labour costs, as well as some sort of operational disturbance.

The share price of Cleanaway has gained over 9% on the ASX over the past 12 months. On the other hand, Cleanaway’s year-to-date share price fell by more than 4% at 10:51 AM AEST on the ASX today (3 May).

What impacted the share price of Cleanaway on the ASX today?

Cleanaway informed today that it expects increased fuel prices to raise operational costs in the second half of FY22 (H2 FY22). The company said that it is currently expecting a rise of up to AU$10 million in its operational costs due to rising fuel prices.

Along with that, Cleanaway will continue to experience challenges when it comes to labour availability due to the pandemic. As a result, it will impact the company’s business in H2 FY22. As a result, Cleanaway will also face challenges in offering services to its clients and operating with full efficacy.

Other than COVID-19 and rising fuel prices, the company is also expecting the recent Australian floods to impact its operations in H2 FY22.

The floods on the east coast have caused damage to properties and loss of vehicles and equipment that are subjected to insurance recoveries.

Cleanaway (CWY) share price

Image source: © Fotonazario | Megapixl.com

Cleanaway also informed that the New Chum landfill is currently closed temporarily due to the floods, causing approximately AU$5-7 million net EBITDA loss in H2 FY22.

Additionally, the company also expects to face damage to post-collections equipment in its health services business. Cleanaway expects a temporary increased working cost of AU$5 – AU$7 million in H2 FY22. Meanwhile, the high pandemic related clinical waste volumes continue to impose additional costs and inefficiencies.

As a result, Cleanaway updated its EBITDA guidance for FY22 today. The company will likely deliver a lower EBITDA by AU$15- AU$20 million than its previously stated guidance.

Read more: Did Cleanaway (ASX:CWY) shares get a dividend boost on ASX today?

About Cleanaway:

Cleanaway Waste Management Limited is an ASX-listed waste management company with a market capitalisation of AU$6.49 billion. The company also offers industrial and environmental service with its headquarter in Melbourne. Cleanaway is popularly known for providing multiple waste management solutions to its clients. The company owns more than 4000 special vehicles originating from 250 locations across Australia.

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