GFL Environmental financial results show revenue increase of 19.5% for second quarter of 2020

GFL Environmental has released its results for the second quarter of 2020. 

"We are very pleased with our strong results for the quarter. Despite the impacts of COVID-19 on parts of the North American economy, we were able to grow revenue in the quarter by 19.5% and Adjusted EBITDA by 23.4%, compared to the second quarter of 2019, resulting in our highest ever reported revenue, Adjusted EBITDA and Adjusted EBITDA margin. Our results for the quarter re-inforce the resiliency of our business model and our success in executing our margin enhancing strategic initiatives. Our skilled team of managers and operators exceeded our expectations in responding to the slowdown resulting from the pandemic," said Patrick Dovigi, Founder and Chief Executive Officer. "Over the course of the quarter as markets and economies began to re-open we saw, and continue to see, sequential increases in commercial activity and volumes in the markets that we serve." 

Mr. Dovigi added, "We remain focused on pursuing our growth strategies, including through organic revenue growth and acquisitions. In June we announced the acquisition from Waste Management, Inc. and Advanced Disposal Services, Inc. of a portfolio of vertically integrated solid waste collection, transfer, recycling and disposal assets across 10 states. The acquisition, which is targeted to close in the third quarter of 2020, is expected to be financed through a combination of capacity under our revolving credit facility and cash on hand. Following the acquisition we expect to maintain our current credit rating profile and leverage within previously stated ranges. With our strong balance sheet, available liquidity and proven access to the capital markets, we believe we are well-positioned to continue to pursue strategic and accretive opportunities as they present themselves." 

Second quarter and year to date results 

Revenue increased by 19.5% to $993.3 million in the second quarter of 2020 compared to the second quarter of 2019. Solid waste core price for the second quarter of 2020 was 3.7% compared to 4.4% in the comparable quarter of the prior year, resulting from the decision to temporarily suspend pricing initiatives in response to COVID-19 disruptions. Solid waste volumes declined 8.3% for the second quarter of 2020, with 80% of the decline attributable to the commercial and industrial collection operations. Revenue for the six months ended June 30, 2020 was $1,924.6 million, an increase of 24.0% compared to the same period in 2019. The increase in both periods was driven by significant revenue growth across all reportable segments both organically and through acquisitions. 

Adjusted EBITDA increased by 23.4% to $261.5 million in the second quarter of 2020 compared to the second quarter of 2019, primarily attributable to strong revenue growth in the quarter. Adjusted EBITDA includes $2.5 million of COVID-19 related costs specifically attributable to incremental personal protective equipment as well as $3.5 million of incremental bad debt expenses. Adjusted EBITDA margin was 26.3% for the second quarter of 2020 as compared to 25.5% in the prior year period. Net loss increased from $68.1 million for the second quarter of 2019 to $115.5 million for the second quarter of 2020.

Adjusted EBITDA increased by 23.9% to $484.3 million for the six months ended June 30, 2020 compared to the same period in the prior year, primarily attributable to strong revenue growth in the period. Net loss increased from $161.4 million for the six months ended June 30, 2019 to $393.5 million for the six months ended June 30, 2020 driven by costs associated with the initial public offering and the early redemption of several series of outstanding unsecured bonds and the extinguishment of 11% payment-in-kind notes as part of the pre-closing capital changes implemented immediately prior to the initial public offering. 

Cash flow from operating activities increased by 137.3% to $132.2 million in the second quarter of 2020 compared to the second quarter of 2019. For the six months ended June 30, 2020, cash flow from operating activities was $82.0 million, an increase of 125.9% compared to the same period in the prior year.