Cleanaway agrees landfill gas JV with LMS Energy
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The news: Cleanaway Waste Management has announced a joint venture with Australian bioenergy and methane abatement company LMS Energy to process and monetise landfill gas (LFG) at Cleanaway's Lucas Heights landfill in New South Wales.
The numbers: LMS will invest around $46 million in the construction of new bio-electricity assets, including a 22 megawatt generation facility, which will replace the site's existing electricity generation infrastructure.
Cleanaway will contribute exclusive rights to the landfill gas at Lucas Heights for 20 years.
The waste management group expects the partnership to contribute incremental EBIT of around $5 million in FY25 and $10 million in FY26. It is expected deliver incremental EBIT of approximately $15 million per year beyond FY26, following full commissioning of the assets.
The company continues to expect FY25 EBIT to be between $395 million and $425 million.
The context: Both Cleanaway and LMS will hold equal ownership of the joint venture, with the deal still subject to customary approvals.
Cleanaway said the agreement with LMS marks a "meaningful step" towards achieving its target of more than $50 million of EBIT in FY26 from its operational excellence program.
What they said: "The JV aligns with our commitment to disciplined capital management, and utilising capital-lite approaches to grow earnings and drive improved returns for shareholders while also supporting our commitment to reduce greenhouse gas emissions," said Cleanaway's chief executive and managing director Mark Schubert.
The source: ASX announcement
