THE WAR of words between the Government and listed waste-to-energy company Covanta over the controversial Poolbeg incinerator in Ringsend, Dublin, continued yesterday.
The project has been moving forward at a snail’s pace, with Minister for the Environment John Gormley opposed to the facility, which, coincidentally, resides in his constituency and is a hot potato with local residents.
Covanta recently announced a special cash dividend and a share buyback programme, which prompted JP Morgan to put out a note this week suggesting that the New Jersey-based company will put the brakes on its international development and focus on returning cash to shareholders.
JP Morgan’s Andrew Smith said: “Covanta recently announced a $1.50 per share ($230 million) special cash dividend, which was about 10 per cent of the company’s market capitalisation. In addition to returning proceeds from the sale of its Asian assets, we expect the company to pay additional cash dividends as its cash on hand builds.”
It remains to be seen if JP Morgan is proven right, but Gormley must be ruing the fact that Covanta didn’t change tack on its global expansion sooner.
