Even the best waste management companies saw significant changes as a result of the COVID-19 pandemic. One of the major changes which was seen was the composition of waste generated. During lockdowns, residential areas were producing more waste in comparison to industrial and commercial centers. This trend was seen because several offices and industries saw partial or complete closures, leading to lower waste production. Apart from this, hazardous and dangerous waste generation saw an increase mainly from pharmaceutical and medical sectors. As a result of this increase in the hazardous waste, treatment capacity was strained in developing countries, resulting in the stockpiling and insufficient disposal of such waste.
In addition, there was strong increase in municipal waste, resulting in significant pressure on existing waste collection and disposal systems. Decrease in recycling activities increased challenges and difficulties for the best waste management companies.
As per the report by Global Market Insights, solid waste generation was affected by significant urban migration, which has resulted in higher demand for efficient and sound solid waste management framework. This kind of framework focuses on public security and economic development.
Both public and private sectors have made strong contributions in establishing functional waste systems which focuses on promoting waste reduction, reuse, and source separation. All of these collectively complemented implementation and execution of solid waste management systems. Experts believe that Municipal Solid Waste Management market should be able to grow by ~2% by 2032. Investment opportunities in climate change projects continue to emerge as solid waste is being utilised to generate renewable energy, which further supports in industry expansion.
With this in mind, we will now have a look at the best waste management companies for long-term growth.
1. Perma-Fix Environmental Services, Inc.
The company provides both nuclear services and management of nuclear and mixed waste.
It saw strong 3Q results as it achieved ~18.4% rise in revenue to $21.9 million, a ~48.2% rise in gross profit, net income of $341,000 and $1.2 million of EBITDA. In its treatment segment, the company saw a steady improvement in waste receipts, helping the company’s visibility and backlog for the upcoming year.
While the company achieved strong year-over-year growth, it believes that it would have generated even stronger results if there had not been any temporary customer delays in the company’s Treatment and Services Segments, which is not unusual.
Revenue for 3Q23 came in at $21.9 million in comparison to $18.5 million for the same period of the previous year. Revenue for Treatment Segment went up by ~$10.8 million for 3 months ended September 30, 2023, from $8.9 million for the same period of the previous year. This growth was mainly because of overall higher waste volume, offset by lower average price because of revenue mix.
Gross profit for 3Q came in at $4.5 million in comparison to $3.1 million for 3Q22. The overall improvements in the gross profit and margin were seen in the Services Segment because of improved margin on its projects. It saw EBITDA of $1.2 million from continuing operations during 3Q23 and adjusted EBITDA of ($374,000) for 3Q22.
2. Quest Resource Holding Corporation
The company is the national provider of waste and recycling services to customers. Revenue of the company came in at $74.5 million in 2Q23, exhibiting a ~3.1% decline in comparison to 2Q22. Gross profit of the company came in at $13.5 million, a 7.9% decline in comparison to 2Q22 and 6.9% increase against 1Q23.
It was able to deliver strong quarter which saw positive momentum. The company added new business, saw improvement in efficiencies, and it made significant progress with acquisition integration, leading to 7% increase in comparison to 1Q23 in gross profit and 26% increase against 1Q23 in adjusted EBITDA.
The company expects momentum to continue through 2H of the year and it is on track to deliver double-digit gross profit growth for FY23. At least part of improvement should be able to come from recent win with significant new customer in a new industry. Over upcoming quarters, the company expects growth rates of adjusted EBITDA toe exceed growth rates of gross profit dollars. This should happen if the company sees the benefit of investments to improve both efficiencies and operating leverage.
3. Montrose Environmental Group, Inc.
Montrose Environmental Group Inc is an environmental services company.
The company released results for 3Q ended September 30, 2023, with its total revenue coming at $167.9 million in comparison to $130.3 million in the prior year quarter, exhibiting a rise of 28.9%.
This revenue growth came from acquisition of Matrix, organic growth in Assessment, Permitting and Response segment and in Measurement and Analysis segment. In addition, increase in CTEH revenues supported this growth. This growth was partially offset by reduced revenues in specialty lab which is being discontinued and its Remediation and Reuse segment supported by timing of projects and a strategic shift in biogas business to higher margin services.
Adjusted net income of the company came in at $9.4 million, and adjusted net income per share stood at $0.18 in 3Q23 against adjusted net income of $7.8 million, and adjusted net income per share of $0.12 during the same quarter of the previous year. The year-over-year growth was seen mainly because of higher revenues.
The company expects revenue of between $590 million – $640 million and consolidated adjusted EBITDA of between $75 million – $81 million for FY23.
Global solid waste management market has been closely associated with overall waste management market, that touched ~$449.26 billion in value in 2023. Factors including development of smart cities and higher adoption of integrated waste management systems should be able to support best waste management companies globally.
Global waste management market should be able to compound at the growth rate of 7% from 2024 – 2032. Key regional markets associated with solid waste management are Asia Pacific, Europe, North America, Latin America, the Middle East, and Africa. Therefore, leading and the best waste management companies operating in these regions are expected to see significant growth stemming from increased government support and higher funding.