Mo-BRUK - Waste Management Solutions for a Cleaner Future
With rising awareness of the impacts of climate change, and a growing understanding of the importance of waste reduction and prevention, the European Union, as part of its broader Climate Action, has called on member states to increase the proportion of municipal waste that can be recycled instead of landfilled or burned to 65% by 2035. This opens up major opportunities for waste management facilities in Poland, where, today, 50% of all household refuse is landfilled. This includes plants operated by Mo-BRUK, which use solidification and stabilization technology to prepare waste for controlled incineration, and which are set to capitalize on Poland's plans to virtually double its municipal waste incineration capacity over the coming years. Aside from Mo-BRUK only one other company can offer similar technology in the domestic market at the moment. Further, Mo-BRUK is perfectly positioned take advantage of Poland's multi-billion railway infrastructure replacement program by helping to reclaim an estimated 1.7 million tonnes of used railway sleepers by converting them to fuel. Last but not least, Mo-BRUK's incineration facilities benefit from increasing municipal waste disposal charges and a government clampdown on illegal dump sites, estimated at PLN 15 billion over 20 years. Mo-BRUK, which in the past decade completed PLN 200 million capacity upgrades, wants to keep growing its presence in northern Poland the CEE region while making consistent shareholder distributions at 50-100% of annual earnings – ambitions backed by a lack of debt, low working-capital needs, and expansion facilitated by high entry barriers to potential competitors. We initiate coverage of Mo-BRUK with a buy recommendation and a target price of PLN 387.49.
Mo-Bruk SA is a Poland-based company involved in the production of concrete. It is also active in the area of hazardous and other than hazardous industrial waste management. Additionally, the Company operates a waste recovery plant, waste recycling plant, alternative fuel production plant and an industrial waste landfill. The Company produces alternative fuels from municipal and industrial wastes. The Company is also the owner of two open non-stop petrol stations for liquefied fuel, as well as a technical inspection station. Mo-Bruk SA is also engaged in the construction of concrete surfaces. As of December 31, 2011, the Company operated one wholly owned subsidiary, Raf-Ekologia Sp. z o.o.
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