Clean Harbors' Safety-Kleen Hikes Pricing To Boost Margins
Zacks Investment Research | Jul 13, 2017 06:38AM ET
Waste management services provider Clean Harbors, Inc. (NYSE:CLH) recently unveiled a slew of measures to augment its profitability amid a challenging macroeconomic environment. These include an upward revision of prices for the collection of used engine and industrial oils by its subsidiary, Safety-Kleen, and a hike in its service stop-fee for its stop-fee program.
With over four decades of experience, Safety-Kleen is reportedly the largest provider of used oil re-refining and recycling, and parts cleaning services in North America. It offers a comprehensive set of services to conserve natural resources while reducing customers' environmental liability, thereby reducing costs and improving return on investments through the sale of recovered products.
In order to mitigate the high operating risks due to volatility in the crude oil markets and associated decline in fuel prices, Safety-Kleen decided to increase the used motor oil disposal pricing rates for its clients. Effective immediately, the restructured pricing rates are applicable to all customers across the U.S. and Canada and are likely to remain so until fuel prices improve significantly. Safety-Kleen has also hiked its stop-fee program to help recoup transportation and labor costs associated with oil collection services, emphasizing on remote service locations.
Management opined that such steps were absolutely necessary to maintain its profitability without compromising on the reliability and quality of services. The market-driven price adjustments are likely to be revisited by the company to avoid further deterioration of its existing spread.
Clean Harbors has underperformed the Zacks categorized Zacks Investment Research
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