October 30, 2018 / 7:51 AM / a year ago

UPDATE 1-Utility Suez sees best quarter in seven years despite China paper impact

(Adds comment on growth, China)

By Geert De Clercq

PARIS, Oct 30 (Reuters) - French waste and water group Suez said strong European recycling revenue helped it book its best quarterly growth in seven years, even though cardboard prices had fallen due to a Chinese import ban.

Suez said that on an organic basis - excluding scope and currency effects - revenue had grown 3.8 percent in the first nine months after growing 3 percent in the first half.

Its quarter-on-quarter organic growth was 5.4 percent, the strongest quarterly growth since the third quarter of 2011.

“In terms of growth, this was our best quarter in seven years,” said Suez chief financial officer Jean-Marc Boursier.

On a gross basis, nine-month revenue rose 13 percent to 12.7 billion euros, including a 12 percent or 1.34 billion euro ($1.52 billion) effect due to the first-time consolidation of Suez’s GE Water acquisition.

Core earnings in the first nine months of the year rose 6.7 percent to 2.05 billion euros, boosted by a strong performance at its key European recycling division, whose revenue rose two percent to 4.64 billion euros.

Boursier said a Chinese import ban on low-quality paper and plastics had mainly hit its paper recycling business, as the price of cardboard had fallen from 112 euros per tonne at the end of 2017 to 77 euros per tonne at the end of September 2018.

He estimated the impact at about 25 million euros on a full-year basis, but this was compensated by strength in other areas of the business as well as strong synergies from GE Water.

The price of low-density polyethylene (LDPE) plastic film had fallen slightly following the halt of Chinese imports, but the price of other recycled plastics, such as PET for water bottles, had increased due to higher oil prices, Boursier said.

Suez confirmed its 2018 earnings guidance for revenue growth of about nine percent and growth in EBIT (earnings before interest and tax) of about 10 percent, both at constant exchange rates. Nine-month EBIT stood at 963 million euros, up 4.4 percent gross and up 9.7 percent at constant exchange rates.

$1 = 0.8797 euros Reporting by Geert De Clercq; Editing by Sudip Kar-Gupta

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below