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Investing.com -- Shares of Veolia (EPA:VIE) declined 2.4% as the market responded to the company’s first-quarter earnings report.
The growth in revenue was attributed to a 2.4% rise in Water revenue to €4.15 billion, driven by higher price tariffs, and a 3.7% increase in Waste revenue to €3.81 billion, bolstered by strong commercial momentum and price increases. However, Energy revenue saw a decline of 1.9% due to lower power prices, although growth excluding power prices stood at 5.3%.
The company’s EBITDA for the quarter reached €1.7 billion, up 5.5% on a constant currency and same-store basis, slightly surpassing consensus estimates of €1.68 billion. Current EBIT was reported at €0.92 billion, about 2.8% ahead of the consensus of €0.89 billion. Veolia has also completed the acquisition of a remaining 30% stake in its Water Technologies and Solutions (WTS) division from CDPQ for $1.75 billion (approximately €1.5 billion), which is expected to generate around €90 million of synergies by the end of 2027.
Cost-saving programs are reportedly modestly ahead of target, with more than €350 million in annual cost efficiency savings already at €91 million year-to-date. The company has also realized €25 million in merger synergies, with a total of €460 million (87%) of its revised €530 million target expected to be achieved by year-end.
Veolia has maintained its full-year 2025 guidance, aiming for organic EBITDA growth of approximately 5-6% and current net income growth of more than 9%. The leverage ratio is anticipated to remain below 3x, with dividends per share expected to grow in line with earnings per share.
RBC analysts commented on the results, stating, "A solid Q1 performance, with EBITDA growth at the mid-point of its full-year guidance (5-6%), which been fully reiterated today. The new acquisition should simplify the division, which was already 70% owned by Veolia, and generate €90m of synergies by the end of the GreenUp Strategy (2027). This should serve as an important new growth driver in achieving its medium-term €8bn EBITDA target, especially as Suez merger synergies is due to complete this year."
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