Slowdown in North Sea oil and gas costs waste group Augean

'‹Waste management company Augean said its underlying pre-tax profit will meet expectations for 2015, but it will book a £3m impairment charge following the slowdown in the North Sea oil and gas industry.'‹
By The Newsroom
Published 25th Jan 2016, 16:49 BST
Updated 25th Jan 2016, 16:54 BST

​The Wetherby-based firm said it​ generated strong net operating cash flows during 2015 and net debt of £4.3m is lower than market expectations.

​The group’s chief executive, Dr Stewart Davies, said: “We have enjoyed strong trading and have good momentum across a number of our businesses as we start 2016.

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“Despite some challenging market conditions, we have secured further total waste management contracts with tier-1 customers, including with oil and gas operators as we continue the diversification of our North Sea Services business.

“The board remains confident in the group’s delivery of further sustainable growth, in line with our strategy.”

​It reported​ a strong performance from its energy & construction division throughout 2015, with a significant increase in volumes sent to landfill compared to 2014.

The high levels of construction waste seen in the first half of 2015 continued through the second half of the year.

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Analyst Jo Reedman at N+1 Singer said: “The group has entered 2016 with positive momentum, despite a challenging backdrop in some of its markets. Taking the gloss off, management has highlighted that updated guidance on landfill tax could potentially reduce volumes of brownfield construction waste into landfill, although the impact is difficult to estimate at this early stage.”

N+1 Singer said it has not changed its profit assumptions.

Related topics:North Sea