(Bloomberg) -- Veolia Environnement SA’s first-half earnings rose 10% thanks to growing demand for its services and cost cuts, putting the company on track for its full-year profit target.
The environmental-services giant is benefiting from the world’s rising need for hazardous-waste treatment, water reuse and desalination technologies as global warming increases droughts and governments and clients bolster efforts to curb pollution.
Veolia’s current net income was €731 million ($792 million) in the first half, compared with €662 million a year earlier, a 15% increase at constant exchange rates, the French firm said in a statement on Thursday. It will exceed €1.5 billion this year, the company reiterated.
“These excellent results reflect our commercial dynamism and operational excellence, as well as the vitality of demand,” Chief Executive Officer Estelle Brachlianoff said in the statement.
Veolia reiterated an annual forecast for “organic” growth in earnings before interest, taxes, depreciation and amortization of 5% to 6% at constant scope and foreign exchange rates.
Shares of the company were 2.8% lower as of 10:24 a.m. in Paris trading, while France’s CAC40 Index was down 1.3%.
The impact of currency changes should slightly turn positive in the second half, and company will meet its 2024 target for current net income, “whatever the forex” impact, Brachlianoff said on a call with analysts. Veolia’s results are always higher in the second half compared with the first half, the CEO added.
The French company also confirmed 2027 targets, and said in a separate statement that it won a contract worth €100 million over six years to modernize one of France’s biggest wastewater treatment plants. It also highlighted other recent commercial successes in the US, Qatar and elsewhere.
On Wednesday, the company agreed to sell its US sulfur business to private equity firm American Industrial Partners LP for $620 million, taking the total of divestments of non-strategic assets signed in the first half to more than €1 billion.
It recently completed the sale of its water-pipe installation business for €260 million, and agreed to sell stakes in a Moroccan water and power utility and in a Chinese water concession for undisclosed amounts.
At the same, it has signed €700 million of acquisitions so far this year, including some waste assets in Germany, Portugal and Brazil. The firm, which also manages district heating networks in central Europe, expects to complete the purchase of a power plant in Hungary in the fourth quarter.
The deals are part of Veolia’s asset-rotation program, as it seeks to boost investment in the treatment of water pollutants, the recycling of critical raw materials, and the production of clean energy.
The company’s leverage ratio at the end of 2024 will be comparable with the end of last year, the CEO said.
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(Updates with share price, CEO comments from sixth paragraph.)
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