Waste Management Segment

Economic environment for the waste management sector

In the 2021/2022 fiscal year, the Waste Management Segment continued to benefit from what was, for the most part, a very good economic environment.

Both nationally and internationally, the Circular Economy Package, formulated at EU level, continues to be the focus of attention. The Circular Economy Package amendment under the Waste Management Act (AWG) is intended to ensure waste avoidance, recycling, reuse, and product design geared towards sustainability. Targets in line with this for recycling, quotas for reusable and disposable packaging, requirements for the reduction of certain plastic products and on the issue of producer responsibility, incineration bans and landfill restrictions have been formulated and pose major challenges for the stakeholders.

One of the focuses here is plastic packaging: in order to achieve the EU target of a 50% recycling rate in 2025, recycling must be doubled in the coming years. In addition, a new independent quota for separate collection of PET beverage bottles becomes mandatory as of 2025. In order to be able to achieve these high targets, the Circular Economy Package, an amendment to the Waste Management Act, envisages the mandatory, staggered introduction of reusable packaging quotas in the food industry as well as a commitment on the part of the beverage industry to charge a deposit on PET and aluminium containers as of 1 January 2025.

Further provisions from the Waste Management Act (AWG) mandates that, starting on 1 January 2023, waste transportation of volumes above 10 t over distances of more than 300 kilometres must be effected by rail or similarly climate-friendly means of transport, with the kilometre threshold due to drop to 100 kilometres by 1 January 2026. Although the amendment offers opportunities, such as relieving the fraught situation in logistics services provoked by a lack of heavy goods vehicle drivers, however, it also entails economic risks.

From 1 January 2023 onward, the amendment to the Packaging Regulation (VVO) requires commercial packaging placed on the market exclusively to be returned via a collection and recovery system. As a waste management company, Energie AG Oberösterreich Umwelt Service GmbH (Umwelt Service GmbH) would in future essentially be limited to only logistics services for a part of the paper and cardboard volumes. The concrete application, feasibility and potential financial impact are still uncertain due to numerous open issues relating to feasibility in practice.

The positive trend from the previous year continued for the recyclable materials paper/cardboard and scrap metals. The Wiesbaden index for paper and cardboard packaging was even higher on average in the 2021/2022 fiscal year than in the previous year, meaning that higher sales revenues were achieved in the reporting period. However, a significant fall in prices was visible at the end of fiscal year 2021/2022. In the scrap metal sector, the average price for steel scrap was also significantly higher than one year earlier, peaking around the middle of the 2021/2022 fiscal year. At the end of the 2021/2022 fiscal year, although the price was lower than the starting price at the beginning of the fiscal year, however, it was still at a relatively high level.

Business development in the Waste Management Segment

In the 2021/2022 fiscal year, sales revenues in the Waste Management Segment amounted to EUR 272.6 million (previous year: EUR 256.2 million), representing an increase of 6.4%. The operating result rose by EUR 4.3 million to EUR 33.9 million compared with the previous year’s figure (EUR 29.6 million).

The price development for the recyclable materials paper/cardboard and scrap metals once again contributed to the increase in sales revenues and EBIT, despite significant price declines for paper/cardboard becoming noticeable at the end of fiscal year 2021/2022. Similarly, electricity and heat revenues for the volumes decoupled from Welser Abfallverwertung (WAV) increased significantly in the first half of the year compared to the previous year. Growth in sales revenues and earnings was also noted for municipal, commercial and industrial waste. The previous year’s EBIT included reversals of impairment for waste incineration plants totalling EUR 4.7 million.

Stable development in waste management services

Incinerated waste volume

in 1,000 t

A throughput of some 591,400 t of incinerated waste volume was achieved at the waste incineration plant in Wels and Lenzing. This is equivalent to an increase of 1.0% compared with the previous year.

The annual inspection at the Lenzing waste incineration plant took place in spring. At WAV, the overhaul of line 2 was completed in May, with line 1 being completed in August 2022.

In the reporting period, the waste incineration plant in Wels distributed 243 GWh of heat (previous year: 234 GWh) to the district heating network and to one other key account customer. Electricity procurement totalled 198 GWh (previous year: 194 GWh).

In the course of the comprehensive strategy project with eww ag, the heat supply to both households and businesses in the Wels area has been significantly expanded and condensed since 2021. In addition, a second large transport pipeline was built in the north of the city in 2021 and 2022, while two state-of-the-art hot water generators were built to secure the district heating supply. This will substantially increase heat extraction at the Wels waste incineration plant. Umwelt Service GmbH took over the exclusive heat supply to eww ag as of 1 May 2022. The extensive preparatory work required for this was successfully completed.

The treatment plants for hazardous waste in Steyr were again very well utilised in the 2021/2022 fiscal year. In terms of maintenance, the focus was primarily on the renovation of the CPO plant (chemical/physical treatment plant for organic waste). In addition, the fire alarm and extinguishing systems were upgraded.

Total waste volume handled

in 1,000 t

Compared with the fiscal year 2020/2021, the total volume handled in the Waste Management Segment dropped by approx. 7.4% to a total of some 1,575,000 t (previous year: 1,701,000 t). While the volumes in Austria declined, especially for waste wood, paper/cardboard, and construction waste, the total volumes in South Tyrol remained at the previous year’s level.

The extension work at the repair workshop in Attnang-Puchheim for company-owned heavy goods vehicles was completed in the reporting period. Beyond this, large-scale roofing work using PV modules was started at the Mühldorf site in order to, among other things, protect the waste material collection centre for several communities against external weather influences, while at the same time generating renewable energy. In addition, modernisations and expansion work has pushed forward at several sites, including fire protection work.

The reconstruction work relating to the relocation of the company headquarters from Hörsching to the WAV site in Wels has been concluded. The relocation of the company headquarters and the accompanying relocation work were completed in the first half of the 2021/2022 fiscal year.

The investigations throughout Austria into the area of collection and transport in the waste management industry initiated by the Federal Competition Authority (BWB) are still in progress. Umwelt Service GmbH is actively involved in the investigation and has assured the BWB of its full willingness to cooperate.

The Neumarkt site in South Tyrol achieved higher earnings compared with the previous year. There were positive developments in commercial and industrial waste. Operations in the production of refuse derived fuels (RDF) and glass sorting were also positive. Compared to this, the scenario in paper and board volumes was challenging with paper mills increasingly competing directly with waste management companies to acquire paper volumes.

In the WDL-Wasserdienstleistungs GmbH (WDL GmbH), the general conditions for drinking water supply and waste water disposal in Austria were largely stable during the reporting period. An important contract with an industrial customer in the service sector was successfully extended. At WDL GmbH, the main focus was on maintaining the secure supply of drinking water and further developing the services offered.