Interest charge

Harsco expects Q2 operating loss due to impairment charge

By Chris Wack


Harsco Corp. said it expects a second-quarter operating loss of $95 million and $97 million, after saying in May that it would see second-quarter operating profit of $17 million to $22 million of dollars.

The new guidance includes a non-cash goodwill impairment charge estimated at about $100 million, Harsco said.

The company said it expects adjusted earnings before interest, taxes, depreciation and amortization of $47.5 million to $50 million for the second quarter, compared with $59 million to $64 million it had previously forecast.

For 2022, Harsco said it now expects an operating loss from continuing operations of $51 million and $61 million, compared to previous guidance for operating profit of $81 million to $96 million. .

Adjusted Ebitda is expected to be between $210 and $220 million for the full year, compared to Adjusted Ebitda of $250 to $265 million previously.

Harsco Environmental’s operational execution was positive in the quarter and the business experienced sequential earnings growth, but HE’s second quarter results are expected to be at the lower end of prior implied guidance due to adverse effects. of currency conversion, the company said.

Clean Earth’s adjusted EBITDA for the second quarter is expected to be $5 million, or $12 million lower than the midpoint of the previous implied guidance, Harsco said. During the quarter, Clean Earth experienced unprecedented incremental cost inflation on third-party transportation, other logistics and disposal services, the company said.

Due to lower earnings expectations and higher discount rates, Harsco said it expects to record a non-cash goodwill impairment charge for Clean Earth in the second quarter. Goodwill impairment is currently estimated at $100 million, he said.

Meanwhile, Clean Earth’s Adjusted Ebitda for 2022 is now expected to be between $40 million and $44 million, he said.

Harsco said it expects to meet its financial covenants at the end of the second quarter and for the foreseeable future.

Harsco shares fell 5% to $5.51 in premarket trading.

The company is expected to release its second-quarter results on August 2.


Write to Chris Wack at [email protected]