Renewi PLC (LON:RWI) said it expects the reduction in waste volumes and other effects of the coronavirus lockdowns to result in a reduction in underlying profit and cash of €20mln in the current quarter.
The UK, Netherlands and Belgium-focused waste and recycling group said it had €252mln of liquidity as at 31 March 2020, including €195mln in cash.
Ahead of full-year results for the year to end-March that are due on 4 June and are expected to be in line with its expectations, management has put into place changes to reduce save €60mln during the new financial year.
Cancelling the final dividend payment for the year just ended, which was announced in March, saved €10mln.
Given the expected short-term impact on earnings, changes have also been agreed with banks so that net debt-to-EBITDA covenants have been loosened to 6.0x in the first half of the current year and then moving to a new long-term test level of 3.5x in September 2021.
"The outlook for the remainder of the year will be dependent on the nature and timing of the lifting of lockdown restrictions and the speed of economic recovery," Renewi said.
Amid the coronavirus, the company’s Dutch arm, which is the main collector of medical waste in the country, created a new service to help with low supplies of PPE, where used masks were collected from hospitals, clinically sterilised and then returned for safe re-use. The project was in place and effective within three weeks of inception and meant up to 48,000 masks per day can be recycled.
Shares in the company were up 8% on Friday morning to 20.17p, though still down almost 44% since the start of the year.