Cleanaway Waste reported FY21 underlying earnings of $535mn, in line with Credit Suisse forecast and consensus, while underlying attributable net profit of $151m was below expectations, due to higher D&A than the broker had forecast.
Mainly driven by increased landfill amortisation at Erskine Park, and full-year contribution from acquisitions and new contract wins, management expects D&A to step up further to $290m (excl. Suez Sydney) in FY22.
While Cleanaway faces a period of severe headwinds, the broker suspects earnings growth momentum could return from second half FY22.
Credit Suisse has raised FY22 net revenue forecasts by 2%, to $2,330m on higher contribution from Solid Waste Services.
Credit Suisse has upgraded Cleanaway to Neutral from Underperform and increased the target to $2.60 from $2.40.
Sector: Commercial & Professional Services.
Target price is $2.60.Current Price is $2.60. Difference: $0.00 – (brackets indicate current price is over target). If CWY meets the Credit Suisse target it will return approximately 0% (excluding dividends, fees and charges – negative figures indicate an expected loss).
