The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Waste’s $269,784 2012 first quarter net income beat its own internal projections by 7 per cent, Tribune Business was told yesterday, with a $200,000 cash flow increase during the period leaving it well-placed to repeat last year’s dividend this year.

Disa Harper, the BISX-listed waste services provider, said the 114 per cent bottom line increase from $125,986 during the 2011 comparative period was driven by a combination of tight expenses controls and a top-line that benefited from the Government’s residential garbage collection contracts.

Those contracts were not in place during the 2011 first quarter, hence the 22.4 per cent rise in year-over-year sales to $2.511 million from $2.052 million.

“We were 7 per cent higher than what we anticipated in the Budget on the bottom line,” Ms Harper told Tribune Business.

“Our total revenues were up not much at all from budget - just 2 per cent - so they were basically flat against forecast.”

Confirming that Bahamas Waste was looking to repeat last year’s capital return to shareholders in the form of dividends, Ms Harper said increased cash flow would aid the company in this cause.

The improved cash flow had come from the absence of capital expenditures that had been incurred during Bahamas Waste’s two previous financial years, as it financed various improvements and new business ventures, such as its biodiesel production facility and cardboard recycling initiative.

“We are definitely looking to pay a dividend this year,” Ms Harper said. “I am hoping it will be consistent with the time it was paid in the previous year, October/November.”

While the final decision rested with Bahamas Waste’s Board, Ms Harper told Tribune Business: “Cash flow is pretty good. We don’t have the capital expenditure we had in previous years, so we’re looking pretty good.

“We had a $200,000 increase in our cash flow position from December to March 2012. I don’t foresee any changes there, as I don’t anticipate the same capital expenditure we had last year and the year before with improvements and new ventures, so we should be in a good position to pay dividends at the beginning of the fourth quarter,”

The big unknown for Bahamas Waste, and its financial performance, is whether the Government will continue to renew its residential garbage collection contracts for various inner-city New Providence areas.

“We went through the second quarter where we lost one of the contracts, but that was reinstated for June,” Ms Harper told Tribune Business.

“It was the month of May where we did not have one of the smaller contracts. In the second quarter we had the government revenue overall. Going into the third quarter, we have not had any indication of whether the contracts will continue for the third quarter.

“We’re in July, and the contracts are going on month-to-month, so if we’re this far into July and nobody has said anything, we’ll likely continue through July.”

Ms Harper said there had been speculation the Department of Environmental Health Services was ordering new trucks, indicating the Government wanted to take the service back in-house, but these would take at least eight weeks to arrive.

This, she added, indicated Bahamas Waste would perform the residential garbage collection services until end-August at least, but conceded: “It’s all up in the air.”

Much of the rise in Bahamas Waste’s accounts receivables since the 2011 year-end, this figure hitting $2.137 million at March 31, is related to sums owed by the Government for residential garbage collections.

“We should see some fall in that at the end of the second quarter, as they’d caught up on that amount, and hopefully we will get a cheque or June before we close it,” Ms Harper said.

As for Bahamas Waste’s other revenue streams, she added that there was “not much growth across the board”.

The BISX-listed company, though, was exploring whether its cardboard waste recycling facility could be expanded to handle other forms of waste.

“The cardboard recycling is still not where we had hoped, although we’re trying to look at other materials, other recycling ventures to get into in the confines of the existing infrastructure,” Ms Harper told Tribune Business.

“We trying to build on the existing premises we have. We are trying to expand on our recycling efforts to see if we can make a go of that.

“Other than that, everything else is just the same - there’s no real growth component in the market.”