Veolia, Suez see waste revenue jump amid a rise in recycled material prices

French utility and waste management company Veolia saw its revenue from waste increase by 17.4% in the third quarter of 2021, driven by higher recycled material prices, the company said Nov. 4.

Veolia saw a sharp rise in the price of recyclate prices in Q3, reporting an average rise of 6.3% in its recycled raw materials. Recycled paper and polymers were key products that saw growth in prices with the higher prices mainly realized in northern Europe in countries such as Germany and the Netherlands.

The European recycled polymers markets has seen prices climb in recent months amid a tight supply landscape and firm demand from brand owners and end markets. According to S&P Global Platts data, recycled LDPE and recycled PP black pellet prices have increased around 8% and 12% respectively between July 1 and Sept. 30.

Veolia also provided an update on its planned merger with French waste-and-water-management company Suez, saying it was "in a very solid position ahead of Suez acquisition".

Suez also saw revenue grow during Q3, attributing higher revenue in its recycling and recovery segment to the positive pricing impact of commodities, including metal, paper and plastics, in France and continental Europe.

Commenting on the surging electricity prices affecting many commodity businesses , CFO Julian Waldron told investors at the company's earnings call that the impact on Suez's profits had been limited.

"Our hedging policy aims at mitigating the risk of volatility and we, therefore, almost completely hedged for 2021," Waldron said. "We generally enter the third quarter of the year around three-quarters hedged and we will have been increasing that over the last few weeks."

Waldron added that as a producer of electricity, Suez's recycling and recovery business had been a strong earnings driver year to date.

In May 2021, Veolia and Suez announced that the two companies would be merging, targeting completion by the end of the year subject to regulatory and competition approvals.