Monday, July 22, 2024

Clean Harbors Inc’s Robust Earnings Growth in Q4 and FY 2023: A Record-setting Year


Clean Harbors Inc (CLH) Reports Solid Growth in Q4 and Full-Year 2023 Earnings

Clean Harbors Inc (NYSE:CLH), a leading North American provider of environmental and industrial services, recently disclosed its financial achievements for the fourth quarter and the entirety of 2023, ending on December 31. The company, renowned for serving a broad spectrum of customers including numerous Fortune 500 entities, highlighted a record-setting year, especially within its Environmental Services (ES) segment, which enjoyed robust demand and advantageous pricing conditions.

The ES segment emerged as a significant growth accelerator, propelling a 5% increase in Q4 revenue to $1.34 billion and culminating in an annual turnover of $5.41 billion. This growth trajectory was complemented by a noteworthy rise in Adjusted EBITDA by 16% for Q4 and an impressive 190-basis point margin enhancement on a year-over-year basis. However, the Safety-Kleen Sustainability Solutions (SKSS) division faced hurdles in Q4 amid declining market conditions for base oil.

Despite these obstacles, Clean Harbors managed to net a Q4 income of $98.3 million, equating to $1.81 per diluted share, with an annual net income standing at $377.9 million, or $6.95 per diluted share. The Adjusted EPS for Q4 reached $1.82, touching $6.99 for the year. Additionally, the company saw a 14% growth in Q4 Adjusted EBITDA to $254.9 million, crossing the billion-dollar mark in the annual Adjusted EBITDA.

In the competitive landscape of waste management, Clean Harbors’ financial milestones underscore its operational proficiency and strategic growth focus. The firm’s ability to bolster its adjusted free cash flow by 11% to $321.9 million in 2023 from $289.9 million in 2022 is a testament to its adept handling of working capital and operational efficiencies.

Operationally, 2023 was a year of significant accomplishments for Clean Harbors. Its strides included expediting the Nebraska incinerator project, acquiring Thompson Industrial, and elevating its ESG ratings. A notable focus on safety led to a TRIR of 0.63, representing the best annual safety performance in the company’s history.

As Clean Harbors sets its sights on 2024, the anticipation is set for sustained momentum. The company forecasts a 2-3% growth in Adjusted EBITDA in Q1 2024 over the same quarter in 2023. The full-year projections for 2024 are optimistic, with Adjusted EBITDA expected to be between $1.05 billion and $1.11 billion and adjusted free cash flow targeted between $340 million and $400 million. These projections reflect a strong belief in the ES segment’s continued vitality and the strategic initiatives underway, like the imminent launch of its Group III program and the assimilation of HEPACO.

The stellar performance in 2023 along with an optimistic outlook for 2024 positions Clean Harbors as a resilient and strategically poised entity in the environmental and industrial services sphere. Investors and stakeholders are poised to witness Clean Harbors’ continued growth trajectory and operational excellence as it navigates towards realizing its Vision 2027 strategy.

Jordan Clark
Jordan Clark
Jordan Clark brings a dynamic and investigative approach to business reporting. Holding a degree in Business Administration and a certification in Data Analysis, Jordan has an eye for detail and a knack for uncovering the stories behind the numbers. His career began in the bustling world of Silicon Valley startups, giving him firsthand experience in tech entrepreneurship and venture capital. Jordan's reports often focus on technology's impact on business, startup culture, and emerging

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