Waste Management Segment

Economic framework conditions for the waste management sector

Compared with previous periods, the economic framework for providing waste management services went through what were, in part, striking changes in the first half of 2022/2023. In view of high inflation levels and the increased cost of logistics services, combined with a drop in business productivity and increasingly difficult conditions for commercial and industrial operations, asserting price increases for traditional waste management services proved challenging.

On the one hand, the waste available on the market for waste incineration was fraught with significant volume fluctuations, especially at the start of the fiscal year. Among other things, this was due to changes in the general economic situation and the productivity of commercial and industrial operations. Despite these volatilities, sufficient waste was available on the market during the first half of 2022/2023 to ensure a continuing high level of utilisation for the waste incineration plants.

On the other hand, the framework conditions for the recycling materials recovered paper/cardboard and for metals changed compared with the previous year, and in some cases quite significantly. After the previous year's very high level, metals experienced a price drop in the first months of the reporting period. Metal prices then settled at a level that was lower compared to the previous year's period but still satisfactory by the end of the first half of 2022/2023.

The development of recovered paper/cardboard was similar. There was a significant price decline here compared with the previous year, with the demand for recovered paper/cardboard also falling drastically. However, the situation improved again towards the end of the first half of 2022/2023.

Besides this, the amendment to the Packaging Ordinance (VVO) provides for obligatory participation in a collection and recovery system for commercial packaging starting on 1 January 2023. In this context, there is an obligation to feed commercial cardboard packaging into a collection and recycling system. This led to changes in or the loss of marketing opportunities for waste management companies for these recycling materials. However, the financial impact cannot be assessed at this stage, as the other framework conditions in the provision of services, such as transport and handling, which waste management companies will continue to provide, have not yet been finalised.

With effect from 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. Thus far, relatively few rail shipments have been affected by this regulation.

Business development in the Waste Management Segment

Sales revenues in the Waste Management Segment amounted to EUR 139.2 million in the first half of 2022/2023 and were therefore roughly at the previous year's level of EUR 139.7 million. The EBIT fell from EUR 26.9 million in the first half of 2021/2022 to EUR 21.2 million in the reporting period.

The decline in earnings was due to falling prices for the recycling materials recovered paper/cardboard and metals. The effect was aggravated by inflationary factors, such as those affecting operating materials and maintenance. Electricity and heat revenue from the waste incineration plant Welser Abfallverwertung (WAV) and EBIT contributions from other waste management services were higher than in the comparable period of the previous year.

Utilisation of the waste incineration plants

Incinerated waste volume

in 1,000 t

The two waste incineration plants in Wels and Lenzing achieved a throughput of 302,434 t in the reporting period (previous year 297,332 t); this is equivalent to an increase of 1.7%.

At the waste incineration plant in Wels, throughput volumes fell compared with the previous year due to an unplanned shutdown in December 2022. Despite this, it was possible to maintain the district heating supply to the city of Wels at all times. The Lenzing waste incineration plant had higher throughput volumes in the first half of 2022/2023 than in the same period of the previous year due to unplanned shutdowns in the first half of 2021/2022.

At the Lenzing waste incineration plant, the annual inspection took place in the period 17 March 2023 to 6 April 2023. In Wels, the inspections of the two incineration lines will not take place until the second half of the 2022/2023 fiscal year, as planned.

Total waste volume handled

in 1,000 t

In the reporting period, the waste incineration plant in Wels distributed 202 GWh of heat (previous year: 163 GWh) to the district heating network of the town of Wels and to one other key account customer. Electricity procurement totalled 91 GWh (previous year: 100 GWh).

The treatment plant for hazardous waste in Steyr was again very well utilised in the reporting period.

Compared with the previous year, there was a downturn in the total volume handled in Austria and South Tyrol to 754,712 t (first half of 2021/2022: 790,774 t), although the plant in South Tyrol was able to record an increase in the volumes handled.

Strategically anchored cost management was consistently pursued in the reporting period and the ongoing optimisation projects were further implemented.

In the first half of 2022/2023, intensive work was carried out on further expanding district heating distribution from the WAV. Activities here continued to focus on technical conversion and installation work, and on organisational changes.

The investigations throughout Austria into the area of collection and transport in the waste management industry initiated by the Federal Competition Authority (BWB) in the 2020/2021 fiscal year are still in progress. Energie AG Oberösterreich Umwelt Service GmbH (Umwelt Service GmbH) is actively involved to help clarify the facts and has assured its full cooperation with BWB.

The economic framework conditions in South Tyrol have been stable since the beginning of the 2022/2023 fiscal year with the exception of the paper unit. The drop in paper volumes was compensated for by commercial and industrial waste and refuse-derived fuels (RDFs). Throughput at the site grew significantly.

The framework conditions for drinking water supply and waste water management in Austria were largely stable during the reporting period. At WDL-WasserdienstleistungsGmbH, the main focus was on maintaining the secure supply of drinking water and further developing the services offered.