Continuing with the call, Mr Tartak highlighted the potential 'uneven recovery' given structural change in subsectors like shopping centres, while an ACCC investigation into pricing is not yet completed. Nonetheless, potential tailwinds heavily outnumber potential headwinds, so that's a net positive.
BIN remains confident it will meet the EBITDA target announced in August 2020.
The takeover bidders should conclude their analysis within a month, with the Board then (through a subcommittee) to consider any formal offer.
Questions commenced at 1030 hours.
A UBS analyst asked re pricing. Mr Tartak said that as more volume comes to market, pricing will gradually rise during the next 12 to 18 months.
Re Queensland, pricing in Queensland and NSW are on par. There is still about 200000 tonnes per annum of waste going up to Queensland from NSW (implied: not from BIN).
Operational costs incurred per tonne decreased during 1H 21.
Pricing increases in the last couple of months have been marginal. In 3Q and 4Q 21, some recovery is expected but it depends on volume recovery.
Internal management changes were made due to 'bolstering of the team' and not for negative reasons.
The ACCC is examining the sector and the July 2019 post-collection price rises to assure itself there wasn't any cartel operating: the investigation has been ongoing for 14 to 15 months.
With capital expenditure, Chris Jeffrey said upon completion of the MPC 2 centre, the asset base can deliver (increased margins) without the need for such high capex.
MPC 2 is expected to start being commissioned in May 2021, taking two to three months in total. The $15m EBITDA is 'on the very low side' of what we expect in earnings as a result of MPC 2 (given closure of Auburn and MPC 1 plants, and lower operating costs given the new plant is able to operate at three times the capacity of MPC 1).
Operating at 1.5 million tonnes (MPC 2) means it needs a new EPA-given licence for Eastern Creek. More margin on the same waste and more redirection of landfill to recycling are some of the benefits of MPC 2.
There is $2.1 million in deferred payments for the new (NSW) landfill levy, but BIN paid more than it needed to originally. (Sorry if my explanation there is confusing).
Within the projection of '$250 million' (EBITDA I think), BIN said this was a 'balanced view' but it excludes vertical integration into Victoria, entry into Qld and the ecology park as these three require extra capex.
In the next 12 months, BIN doesn't plan on accepting a lot of volume at low price points as it did short term under COVID-19.
The conference concluded at 1046 hours.
You'll note that I may not have fully understood a couple of the more technical points above, despite having read the presentation and other material this morning. Please clarify for the sake of other 'HC' viewers.
BIN Price at posting:
$3.20 Sentiment: Hold Disclosure: Held
