Lassila&Tikanoja, Finland based provider of high-quality services for waste sorting, collection and recycling, has published its interim report January till June 2009. Although operating profit excluding non-recurring and imputed items rose, the recession was making itself felt in several segments.

The net sales of Environmental Services (waste management, recycling services, L&T Biowatti, environmental products) for January–June decreased by 5.8 percent to Euro 143.3 million (Euro 152.1 million). In waste management, net sales remained at the previous year’s level despite the reduction in waste volumes resulting from the slowdown particularly in new construction. Active renovation operations, however, helped offset the decline in waste volumes. Profitability improved in the waste management business, thanks to production efficiency improvement measures.

The market prices of secondary raw materials (plastics, fibres, metals) and their demand remained low in the first half. The investment programme covering the construction of additional capacity for the Kerava recycling plant was changed, leaving the investment smaller than was originally planned. The current project involves the construction of a combined plant that will be able to handle both construction waste and trade and industrial waste. The plant is scheduled to be completed in 2010.

The demand for the biofuels supplied by L&T Biowatti declined in the first half as a result of lower than expected electricity production volumes and the decline in the operating rates in the forest industry. The low price of emission rights eroded the competitiveness of wood-based fuels against coal and oil. A forestry service organisation focusing on energy wood procurement launched operations in January, and the Luumäki wood pellet plant was closed in May.

In April, waste management operations in Russia were extended to cover the city of Noginsk. Although the growing uncertainty of the Latvian economy poses challenges for business development, it has also improved the availability of labour and lowered labour costs.

L&T Industrial Services (hazardous waste management, industrial solutions, wastewater services, L&T Recoil) generated net sales of Euro 32.4 million (Euro 31.9 million) in January–June, showing an increase of 1.7 percent. Lower operating rates in the industry reflected particularly strongly on hazardous waste volumes. Nevertheless, the division’s net sales and profitability picked up from the previous year, thanks to large projects in the first half and continued production efficiency improvement measures. Damage repair services were transferred to the Property and Office Support Services division at the beginning of the year.

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