The share price of Cleanaway Waste Management Ltd (ASX: CWY) is up 4% after the company gave a coronavirus update.
Here's what Cleanaway announced:
Trading update
In terms of actual operations and earnings, Cleanaway said that its performance remains in line with its internal forecasts and its FY20 earnings guidance. It also said it hasn't seen any material change in volumes across any of its operating segments so far.
However, due to the increasing uncertainty in the market because of the coronavirus outbreak, especially in the small and medium enterprise (SME) segment, management thought it was prudent to suspend its FY20 earnings guidance.
What about the balance sheet?
Cleanaway reassured the market by saying it has a strong balance sheet and "significant" liquidity with more than $357 million of committed headroom available at the end of February 2020 under existing banking facilities.
In addition to that, in February 2020 the company issued long-term notes in the US private placement market, which increased the weighted average maturity across our debt facilities to around six years.
The ratios of 'EBITDA to net debt' and 'interest cover' are well within the company's debt covenants according to management.
What about the dividend?
Cleanaway has confirmed that it will continue with its previously announced interim dividend of 2 cents per share which will be paid on 3 April 2020.
CEO comments
Cleanaway CEO and Managing Director Vik Bansal said: "Cleanaway provides a range of essential services to a diverse customer base which includes municipal councils, government infrastructure, hospitals, resources, manufacturing, commercial and industrial customers.
"As the COVID-19 situation evolves and uncertainty increases, we expect the SME part of our C&I waste volumes to be impacted. At this stage, we expect the demand for other services, such as health, municipal collections and related post-collections services to remain strong.
"We are taking measures to help ensure the safety and welfare of our employees and customers and we remain confident in the resilience of our business."
