Covanta shuffles leadership, launches strategic review of operations to help reinvigorate business

Covanta Holding Corp., Morristown, New Jersey, announced on Oct. 29 that it is launching a comprehensive strategic review of the company's operations, growth priorities and capital structure. As part of this objective, the board of directors appointed Michael Ranger as president and CEO to lead this review and its subsequent execution. Ranger succeeds Stephen Jones, who is stepping down from his roles at Covanta.

Covanta noted in a release that, “Even as the company's underlying business continues to perform well, particularly during the pandemic, the board believes that the value of the company's assets and potential are not fully reflected in the market today. Therefore, this strategic review is a well-timed opportunity to explore all options to enhance shareholder value, including assessing plans for each of our business lines and geographies. This review will be broad in scope and will be completed in due course.”

"We believe that now is the right time to review and refocus our strategy to capitalize most effectively on Covanta's strengths,” Sam Zell, chairman of the board, says. “Mike brings significant depth of experience in the power and waste-to-energy industries, with specific expertise in driving strategic and structural improvements in infrastructure businesses, and we are fortunate to have him lead this initiative for Covanta."

"This is an opportunity to step into a company that has significant value-creation potential, and I appreciate the board's confidence,” Ranger says. “I look forward to working with Covanta's talented team to unlock this value for our shareholders. The dedication of our employees is crucial to our shared success, and the strong long-term relationships with clients and host communities will continue to be one of the cornerstones of our business."

"We have already begun to realign the management team in order to sharpen our focus on key priorities,” Ranger concludes. “Derek Veenhof will lead our core domestic waste-to-energy business as chief operating officer, with responsibility for commercial activities, facility operations and asset management. Further, I am pleased that Owen Michaelson, a Covanta director since 2018, will be joining the team in January as president of Covanta Europe. Owen brings his three decades of experience in development and the waste industry in the UK to our growing business in the UK and Ireland."

The company also released its Q3 earnings Oct. 29. From the same period the prior year, the company grew its revenue from $465 million to $491 million, its net income declined from $14 million to $5 million, its adjusted EBITDA rose from $125 million to $128 million, its net cash provided by operating activities increased from $25 million to $36 million, and its free cash flow decreased from $22 million to $3 million.

"During the third quarter, we saw continued recovery from the initial months of the pandemic, most notably in the waste market, with tip fees up 3 percent year-over-year," Covanta CFO Bradford Helgeson says. "While the operating environment remains challenging, our team has performed at a very high level, as our facilities matched last year's strong availability. We will continue to focus on operating safely and reliably, while progressing our growth initiatives, particularly in the UK."