Republic Services, Inc. (NYSE: RSG) reported 14% revenue growth in the first quarter of 2022, while maintaining merger and acquisition activity.
The Phoenix-based waste management services company reported net income of $352 million, or 11.9% of first-quarter revenue.
“We delivered double-digit revenue, EBITDA and free cash flow growth while making investments to grow our environmental solutions business and further strengthen our differentiated capabilities,” said Jon Vander Ark, President and CEO. “Our results demonstrate the positive impact that our strategic investments are having on the business, not just today, but for years to come.”
The core price was a major contributor to the revenue increase. Republic said the core price boosted revenue by 6%. The Q1 2022 core price was 7.6% on the open market.
Republic recorded an average recycled feedstock price of $201 per ton in the first quarter of 2022, up $68 per ton from the year-ago quarter.
Adjusted EBITDA reached $903.5 million in the first quarter, with an adjusted EBITDA margin of 30.4% of revenue.
Republic hailed the recent acquisition of US Ecology, which is expected to bring a $100 million cross-sell revenue opportunity with the portfolio combination. He announced that he had already invested more than $65 million in acquisition costs by the end of the first quarter of 2022.
“We are thrilled to welcome US Ecology employees to the Republic team,” Jon Vander Ark, president and CEO, said in a statement. “With US Ecology’s deep expertise in specialty waste treatment, this acquisition strengthens our position as a leading environmental services company offering one of the most comprehensive sets of products and services to our customers. “
He said cash provided by operating activities in the first quarter was $705.6 million, up 6.7% year-on-year (YOY). Adjusted free cash flow reached $530.9 million, up 14.4% from the first quarter of 2021.
Cash flow from operating activities was $705.6 million, an increase of 6.7% over the prior year. Adjusted free cash flow, a non-GAAP measure, was $530.9 million, an increase of 14.4% over the prior year.
Vander Ark commented on the joint partnership with Archaea Energy to progress towards its 2030 sustainability goal of increasing the use of biogas. The 39 renewable natural gas (RNG) projects will be the country’s largest RNG portfolio build to date. According to the companies, Republic and Archaea will convert landfill gas into pipeline-grade RNG that can be used for a variety of applications to move gas from fossil fuels.
The majority of projects are expected to come online between 2023 and 2027.
“This joint venture, along with our 17 landfill gas, is expected to generate approximately $100 million as we continue to be recognized for our commitment to sustainability,” Vander Ark said.