By the numbers
Q4 revenue: $529M
Up 13% year over year, driven by higher services demand and pricing in the Clean Earth and Harsco Environmental segments
2023 full-year revenue: $2.07B
Up 9.5% year over year
Q4 net loss: $53.6M
Compared with a net loss of $36.1M the previous year
- Financial picture: During Enviri’s Q4 earnings call Thursday, CEO Nick Grasberger said the business “delivered its best quarter in many years.” He touted double-digit growth for revenue and earnings before interest, taxes, depreciation, and amortization in the company’s Harsco Environmental and Clean Earth segments. However, the company is still working to reduce its debt leverage ratio, currently at 4.1x. It’s also working to improve its share price, which Grasberger said “has not kept pace with the improving fundamentals of our businesses.”
- Clean Earth highlights: Grasberger touted Clean Earth, the environmental and regulated waste management services division, as being a “primary contributor” to future earnings growth in 2024. He highlighted its recent hazardous waste disposal agreement with Veolia North America and its involvement with a U.S. Department of Defense PFAS study as signs of momentum. In Q4, the Clean Earth division’s revenues increased 12% year over year due to higher demand and pricing, and it recycled or reused 10 billion pounds of waste in 2023, added CFO Tom Vadaketh.
- PFAS management: Enviri continues to focus on PFAS management as a business growth opportunity, and in January announced it would form ReSolve, a new program focusing specifically on PFAS remediation and management. In 2023, the Clean Earth segment contributed to “increasing our capabilities and engagement” in that sector, Grasberger said. However, Enviri won’t include PFAS-related work in its 2024 financial outlook due to regulatory uncertainty from the U.S. EPA.
- Harsco Environmental highlights: Harsco Envronmental’s Q4 revenues increased 14% year over year due to increased volumes and price, Vadaketh said. The division, which offers material processing and environmental services to the global steel and metals industries, won about 20 service contract renewals and five new contracts in 2023, he said. The division has a “lengthy pipeline of growth opportunities,” especially as the volatility of its earnings and cash flow have “lessened significantly,” Grasberger added.
- Rail challenges: Enviri continues its work to sell its rail assets, but experienced challenges during Q4, Grasberger said. “There is outside interest in the purchase of our rail division,” he said, but the company is facing delays in reaching an agreement on the terms of what he described as a “large, loss-making European contract that pushed out the divestiture and negatively impacted our cash flow.” Higher short-term interest rates also affect the business, he said.
- Outlook: Enviri expects its 2024 adjusted EBIDTA to be between $300 million and $320 million, while 2024 free cash flow is estimated to be between $20 million and $40 million. It expects revenues in its Harsco Environmental and Clean Earth divisions to reach low single-digit year-over-year growth.
