GFL anticipates rosy second half of 2022 in quarterly report

In response to a strong second quarter, GFL Environmental Inc., Vaughan, Ontario, has announced in its quarterly report that it’s increasing its guidance for the second time this year.

“We are increasing our guidance for revenue by 375 million Canadian dollars, as well as adjusted EBITDA and adjusted free cash flow despite the current inflationary environment and rising interest rates,” GFL Founder and CEO Patrick Dovigni says. “We continue to see upside opportunities ahead of us as a result of our robust M&A (merger and acquisition) pipeline and the contribution from any incremental M&A completed in the second half of the year would be additive to our updated guidance.”

Compared with the second quarter of 2021, revenue increased by 40.4 percent to about CA$1.7 billion, the report states. Contributing to that increase was organic revenue growth of 13.5 percent, as well as CA$360 million in anticipated revenue from acquisitions completed this year. For the same quarter last year, revenue was about CA$1.2 billion.

Net income for the company was CA$64.2 million for the second quarter this year compared with CA$62.5 million for the second quarter of 2021.

GFL’s earnings before interest, taxes, depreciation and amortization (EBITDA) were CA$453.3 million, up 34.2 percent from the same period last year.

Dovigni says some of the fuel for the company’s optimism about the remainder of the year stems from its planned M&A activity and that which the firm has completed thus far in 2022.

“We remain focused on our strategy to create long-term value for all stakeholders,” he says. “We have completed 28 acquisitions year to date, the majority of which were smaller tuck-in acquisitions, which have meaningfully densified our solid waste footprint within the markets we serve. Our outsized M&A activity during the first part of this year is expected to contribute annualized revenue of approximately CA$360 million and puts us on track to exceed the upside opportunity from M&A that we identified at the beginning of the year.”

Revenue for the year is projected to be about CA$6.425 billion and CA$6.475 billion, up from previous estimates of ranging from CA$6 billion to CA$6.1 billion.

As part of the second quarterly report, the company also has adjusted its EBITDA and adjusted free cash flow. Full-year EBIDTA is estimated to come in at between CA$1.71 billion and CA$1.73 billion compared with an earlier estimate of between CA$1.68 billion and CA$1.72 billion.

Adjusted free cash flow for the year is estimated to be between CA$650 million and CA$680, up from previous estimates of CA$645 million to CA$675 million.

The company continues to invest in recycled natural gas (RNG) facilities, as well. GFL is working on five currently and more are in the works, according to the quarterly report. In addition to those, seven are in the “negotiation” phase, and nine more are in the “request for proposal” stage, Dovigni says.