Waste Management Segment

General economic conditions of the waste management sector

In the first half year of 2018/2019, the waste management industry continued to benefit from a favourable economic environment, thus continuing the positive trend of the previous year.

Due to what were still high volumes of waste that needed to be thermally treated, waste incineration plants were well utilised throughout Europe.

Both nationally and internationally, the issue of responsible recycling materials management continued to be at the centre of attention. Guidelines and specifications formulated at European level, for example, in the form of the Ecodesign Directive or the EU Circular Economy Package, aim to achieve recyclable product designs and the use of secondary raw materials in production processes, waste recycling and, finally, a reduction in the quantities of waste sent to landfill sites.

On 1 January 2019, a material amendment to the Waste Wood Ordinance came into force; this has an impact on collection, sorting and recycling. Waste wood must be separated by ordinance into the qualities “material” (recycling-capable), and “thermal” (designated for thermal treatment due to lack of recyclability). The impact the legal change will have on the waste disposal sector is currently not foreseeable.

Recycled materials exhibited varied development compared with the previous year: while the price of copper remained approximately at the same high level as in the previous year, the price of steel scrap fell slightly. The recovered paper index dropped noticeably in a year-on-year comparison, but then remained stable as of the third quarter of the previous year.

Business development in the Waste Management Segment

In the first six months of 2018/2019, sales revenues in the Waste Management Segment amounted to EUR 114.3 million and were thus 0.9% up on the previous year's figure of EUR 113.3 million. The EBIT fell by 7.2% from EUR 8.3 million in the first half of 2017/2018 to EUR 7.7 million in the reporting period. This was attributable, among other things, to higher maintenance costs and the increase in provisions for landfills due to a lower calculated interest rate.

However, both operational sales revenues and operational earnings in the Waste Management Segment increased, although higher expenses were incurred in the scope of the 10-year maintenance interval of a turbine downstream of the incineration lines in Wels, and lower electricity sales were achieved as a result of the turbine downtime.

Higher waste volumes, for example of domestic and bulky waste, take-back systems, waste materials and recyclables, as well as higher disposal prices contributed to the positive operating earnings trend.

Optimal utilisation of incineration plants

The two incineration plants at Wels and Lenzing were again fully utilised in the first half of 2018/2019, despite a slight drop in the thermally processed waste volume, and reached a throughput of 303,958 tons (previous year 315,094 tons). Work on topics such as technological optimisation, material flow management, heating value and impurities was consistently continued. Due to overhaul work on the turbine of incineration line 2 in Wels, the line had to be taken off the grid and could not be put back into operation until later than planned. It proved possible to operate the incineration plant in Lenzing without any issues until the overhaul, which was carried out as scheduled in February 2019.

In the reporting period, the waste incineration plant in Wels distributed 127 GWh of heat (previous year: 150 GWh) to the district heating network of the town of Wels and to one other key account customer. Electricity procurement in the Waste Management Segment totalled 70 GWh (previous year: 95 GWh).

The chemical-physical treatment plant for inorganic waste in Steyr exhibited a very high level of utilisation in the reporting period.

Compared with the previous year, the total volume handled in Austria and South Tyrol fell slightly to 851,342 tons (first half of 2017/2018: 855,860 tons).

Cooperation with the public sector was intensified, in particular the municipalities continue to represent a significant target group for Energie AG Oberösterreich Umwelt Service GmbH's range of services. Strategically anchored cost management was also consistently pursued in the reporting period, and the ongoing optimisation projects were continued.

Structural optimisation in South Tyrol completed

The completion of the major conversion work at the Neumarkt site meant that business operations have been largely trouble-free in the past six months. The planned increases in efficiency were reflected in higher sales revenues and earnings.