Waste Connections Q3 income up over 2023

Toronto-based Waste Connections Inc. has reported third quarter 2024 net income of $308 million, or $1.19 per share, representing a 34.5 percent increase compared with its net income of $229 million, or 89 cents per share, one year earlier.

Year to date, the company’s $813.6 million net income represents a 27.9 percent gain from the $636 million the waste and recycling firm netted in the first nine months of 2023.

“We are extremely pleased by the strength of our operating and financial results in the period, positioning for another increase to our full year 2024 outlook [and] with momentum as we look ahead to 2025,” says Ronald J. Mittelstaedt, president and CEO of Waste Connections.

The CEO says the firm’s solid waste operations experienced 6.8 percent “core pricing” growth that Mittelstaedt says “was supplemented by incremental acquisition contributions and 90 basis points [and] sequential improvement in solid waste volumes during the period to drive results above expectations.”

Continues the executive, “Solid operational execution enabled us to deliver adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 33.7 percent in the third quarter, as expected, up 120 basis points year over year, overcoming margin dilution from acquisitions closed during the quarter and storm-related impacts at quarter end.”

Mittelstaedt points to success in personnel management as contributing to Waste Connections’ positive earnings report. “Our results also reflect continued progress in employee retention, with voluntary turnover improving for the eighth consecutive quarter.”

According to Waste Connections, voluntary turnover within the firm declined 22 percent in 2023, with “continued improvement in 2024 bringing total declines of over 40 percent [in voluntary turnover] from peak levels in 2022.”

Says Mittelstaedt, “We anticipate that our innovative approaches to drive continued improvement in employee engagement and retention should position us in 2025 for another year of above average underlying margin expansion in solid waste collection, transfer and disposal.”

In its breakdown of reported revenue for the quarter, solid waste collection represented more than 69 percent of Waste Connections’ total this summer, followed by “solid waste disposal and transfer” at 16.9 percent of revenue.

Coming in a distant third, representing 2.9 percent of reported revenue for the quarter, was the Waste Connections “solid waste recycling” category. However, the company’s $67.1 million in third quarter 2024 recycling revenue signifies a 91.2 percent hike compared with the $35.1 million in recycling revenue in the summer of 2023.

Looking toward next year, Mittelstaedt comments, “We should be positioned for high single-digit adjusted EBITDA growth in 2025 on expected mid to high single-digit revenue growth, including approximately 2 percent revenue carryover from a record amount of private company acquisition activity expected to be completed in 2024, with upside potential from additional acquisition activity.”