All financial figures are in Canadian dollars unless otherwise
noted
CALGARY, AB, Nov. 1, 2021 /PRNewswire/ - Gibson Energy Inc.
announced today its financial and operating results for the three
and nine months ended September 30,
2021.
"We are pleased to report another strong quarter from both an
operational and financial perspective, with our Infrastructure
segment run-rate increasing with a partial quarter contribution
from the DRU beginning operation and Marketing performance within
our initial outlook," said Steve
Spaulding, President and Chief Executive Officer. "Our
focus remains on securing incremental growth projects while
maintaining the 5x to 7x EBITDA build multiples that we have
consistently achieved over the past several years. We have
also continued to advance Sustainability and ESG at Gibson,
recently adopting a Net Zero by 2050 target and being recognized
with a "AAA" rating by MSCI ESG Ratings."
Financial Highlights:
- Revenue of $1,808 million in the
third quarter, a $443 million or 33%
increase over the third quarter of 2020, a result of higher
commodity prices and volumes increasing contribution from the
Marketing Segment
- Infrastructure Adjusted EBITDA(1) of $104 million in the third quarter, an
$8 million or 9% increase over the
third quarter of 2020, due to additional tankage in service at
Hardisty as well as a contribution
from the DRU for a portion of the current quarter
- Marketing Adjusted EBITDA of $16
million in the third quarter, a $3
million or 23% increase over the third quarter of 2020,
reflecting slightly improved margins in the Crude Marketing
business
- Adjusted EBITDA on a consolidated basis of $111 million, a $10
million or 10% increase over the third quarter of 2020, due
to the factors discussed above
- Net Income of $36 million in the
third quarter, an $18 million or 105%
increase over the third quarter of 2020, a result of debt
extinguishment costs in the prior quarter as well as the factors
described above
- Distributable cash flow of $71
million in the third quarter, a $6
million or 9% increase over the third quarter of 2020, with
increased contributions from both the Infrastructure and Marketing
segments being partly offset by higher replacement capital and
taxes in the current quarter
- Payout ratio on a trailing twelve-month basis of 72%, near the
low end of Gibson's 70% – 80% target range
- Maintained a strong financial position, with Net Debt to Pro
Forma Adjusted EBITDA at September 30,
2021 of 3.2x, within the Company's 3.0x – 3.5x target range,
and remain fully-funded for all sanctioned capital
Strategic Developments and Highlights:
- Commenced operation of the DRU on-schedule and within expected
capital cost
- Announced the addition of Ms. Juliana
Lam to the Company's Board of Directors, who will also serve
on the Audit Committee
- Subsequent to the quarter, received the top "AAA" rating from
MSCI ESG Ratings, being only one of three companies globally in the
Oil & Gas Refining, Marketing, Transportation & Storage
industry and the only company in North
America in that industry to receive this leadership
rating
- Subsequent to the quarter, announced an ambitious Net Zero by
2050 target. As part of ensuring the Company has a credible path to
reaching this target, identified the ability to reduce
approximately 90% of current Scope 1 and 2 emissions through the
application of existing technologies already in commercial use in
North America
(1)
|
Adjusted Earnings
before Interest, Tax, Depreciation and Amortization and other
adjustments ("Adjusted EBITDA"), Distributable Cash Flow, Interest
Coverage Ratio and Dividend Payout Ratio are non-GAAP measures as
noted in the section titled "Non-GAAP Financial Measures" section
in Gibson's Management Discussion and Analysis for the three and
nine months ended September 30, 2021 ("MD&A"). The applicable
definitions and reconciliations of these non-GAAP measures to the
most directly comparable GAAP measures are set out in the "Non-GAAP
Financial Measures" section of the MD&A. Effective Q1
2021, the Company has updated the manner in which it determines
Adjusted EBITDA and prior period comparative figures have been
restated to conform to this new presentation. See "Adjusted
EBITDA" in this news release and "Non-GAAP Financial Measures" in
the MD&A for the definition and reconciliations of Adjusted
EBITDA.
|
Management's Discussion and Analysis and Financial
Statements
The 2021 third quarter Management's Discussion
and Analysis and unaudited Condensed Consolidated Financial
Statements provide a detailed explanation of Gibson's financial and
operating results for the three and nine months ended September 30, 2021, as compared to the three and
nine months ended September 30, 2020.
These documents are available at www.gibsonenergy.com and at
www.sedar.com.
2021 Third Quarter Results Conference Call
A
conference call and webcast will be held to discuss the 2021 third
quarter financial and operating results at 7:00am Mountain Time (9:00am Eastern Time) on Tuesday, November 2, 2021.
The conference call dial-in numbers are:
- 416-764-8659 / 1-888-664-6392
- Conference ID: 31512031
This call will also be broadcast live on the Internet and may be
accessed directly at the following URL:
-
https://produceredition.webcasts.com/starthere.jsp?ei=1499780&tp_key=f0cfbf3e73
The webcast will remain accessible for a 12-month period at the
above URL. Additionally, a digital recording will be
available for replay two hours after the call's completion until
November 16, 2021, using the
following dial-in numbers:
- 416-764-8677 / 1-888-390-0541
- Replay Entry Code: 512031#
Supplementary Information
Gibson has also made
available certain supplementary information regarding the 2021
third quarter financial and operating results, available at
www.gibsonenergy.com.
About Gibson
Gibson Energy Inc. ("Gibson" or the
"Company") (TSX: GEI), is a Canadian-based liquids
infrastructure company with its principal businesses consisting of
the storage, optimization, processing, and gathering of liquids and
refined products. Headquartered in Calgary, Alberta, the Company's operations are
focused around its core terminal assets located at Hardisty and Edmonton, Alberta, and include the Moose Jaw
Facility and an infrastructure position in the U.S.
Gibson shares trade under the symbol GEI and are listed on the
Toronto Stock Exchange. For more information, visit
www.gibsonenergy.com.
Forward-Looking Statements
Certain statements
contained in this press release constitute forward-looking
information and statements (collectively, forward-looking
statements). These statements relate to future events or future
performance. All statements other than statements of historical
fact are forward-looking statements. The use of any of the words
"anticipate", "plan", "aim", "target", "contemplate", "continue",
"estimate", "expect", "intend", "propose", "might", "may", "will",
"shall", "project", "should", "could", "would", "believe",
"predict", "forecast", "pursue", "potential" and "capable" and
similar expressions are intended to identify forward-looking
statements. The forward-looking statements reflect Gibson's beliefs
and assumptions with respect to, among other things, future
operating and financial results, future growth in worldwide demand
for crude oil and petroleum products; crude oil prices; no material
defaults by the counterparties to agreements with Gibson; Gibson's
ability to obtain qualified personnel, owner-operators, lease
operators and equipment in a timely and cost-efficient manner; the
regulatory framework governing taxes and environmental matters in
the jurisdictions in which Gibson conducts and will conduct its
business; changes in credit ratings applicable to Gibson; operating
costs; future capital expenditures to be made by Gibson; Gibson's
ability to obtain financing for its capital programs on acceptable
terms; the Company's future debt levels; the impact of increasing
competition on the Company; the impact of changes in government
policies on Gibson; the impact of future changes in accounting
policies on the Company's consolidated financial statements; the
impact of the COVID-19 pandemic, including related government
responses thereto, on demand for crude oil and petroleum products
and Gibson's operations generally; Gibson's ability to effectively
transition its operations as required in response to the COVID-19
pandemic; the availability of coverage under Gibson's insurance
policies (including in respect of Gibson's business interruption
insurance policy); the Company's ability to successfully implement
the plans and programs disclosed in Gibson's strategy, Gibson's
goal of achieving Net Zero GHG emissions by 2050 and other ESG
related goals, the credibility and success of Gibson's intended
path to achieve its Net Zero by 2050 target and other assumptions
inherent in management's expectations in respect of the
forward-looking statements identified herein.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. Although Gibson believe these
statements to be reasonable, no assurance can be given that the
results or events anticipated in these forward-looking statements
will prove to be correct and such forward-looking statements
included in this press release should not be unduly relied upon.
Actual results or events could differ materially from those
anticipated in these forward-looking statements as a result of,
among other things, risks inherent in the businesses conducted by
Gibson; competitive factors in the industries in which Gibson
operates; prevailing global and domestic financial market and
economic conditions; world-wide demand for crude oil and petroleum
products; volatility of commodity prices, currency and interest
rates fluctuations; product supply and demand; operating costs and
the accuracy of cost estimates; exposure to counterparties and
partners, including ability and willingness of such parties to
satisfy contractual obligations in a timely manner; future capital
expenditures; capital expenditures by oil and gas companies;
production of crude oil; decommissioning, abandonment and
reclamation costs; changes to Gibson's business plans or strategy;
ability to access various sources of debt and equity capital,
generally, and on terms acceptable to Gibson; changes in government
policies, laws and regulations, including environmental and tax
laws and regulations; competition for employees and other
personnel, equipment, material and services related thereto;
dependence on certain key suppliers and key personnel; reputational
risks; acquisition and integration risks; risks associated with the
Hardisty DRU project; capital project delivery and success; risks
associated with Gibson's use of technology; ability to obtain
regulatory approvals necessary for the conduct of Gibson's
business; the availability and cost of employees and other
personnel, equipment, materials and services; labour relations;
seasonality and adverse weather conditions, including its impact on
product demand, exploration, production and transportation;
inherent risks associated with the exploration, development,
production and transportation of crude oil and petroleum products;
risks related to widespread epidemics or pandemic outbreaks,
including the COVID-19 pandemic and government responses related
thereto, and the impact thereof to the other risks inherent in the
businesses conducted by Gibson; risks related to actions of OPEC
and non-OPEC countries, including the effect thereof on the demand
for crude oil and petroleum products and commodity prices; and
political developments around the world, including the areas in
which Gibson operates, the development and performance of
technology and new energy efficient products, services and programs
including but not limited to the use of zero-emission and renewable
fuels, carbon capture and storage, electrification of equipment
powered by zero-emission energy sources and utilization and
availability of carbon offsets, many of which are beyond the
control of Gibson. Readers are cautioned that the foregoing lists
are not exhaustive. For an additional discussion of material risk
factors relating to Gibson and its operations, please refer to
those included in Gibson's Annual Information Form dated
February 22, 2021 as filed on SEDAR
and available on the Gibson website at
www.gibsonenergy.com.
Non-GAAP Measures
This news release refers to
certain financial measures that are not determined in accordance
with IFRS. Distributable cash flow is not a measure recognized
under IFRS and does not have standardized meaning prescribed by
IFRS and, therefore, may not be comparable to similar measures
reported by other entities. Management considers this to be an
important supplemental measure of the Company's performance and
believes this measure is frequently used by securities analysts,
investors and other interested parties in the evaluation of
companies in industries with similar capital structures.
Distributable cash flow is used to assess the level of cash flow
generated and to evaluate the adequacy of internally generated cash
flow to fund dividends. Changes in non-cash working capital are
excluded from the determination of distributable cash flow because
they are primarily the result of fluctuations in product
inventories or other temporary changes. Upgrade and replacement
capital expenditures are deducted from distributable cash flow as
there is an ongoing requirement to incur these types of
expenditures. The Company may deduct or include additional items in
its calculation of distributable cash flow; these items would
generally, but not necessarily, be items of a non-recurring nature.
Additional information about reconciliation of historical
distributable cash flow to its most closely related IFRS measure,
cash flow from operating activities can be found in Gibson's
Management Discussion and Analysis available on SEDAR at
www.sedar.com and at www.gibsonenergy.com.
For further information, please contact:
Mark Chyc-Cies
Vice President, Strategy, Planning & Investor Relations
Phone: (403) 776-3146
Email: mark.chyc-cies@gibsonenergy.com
ADJUSTED EBITDA
Adjusted EBITDA is defined as earnings before net interest, tax,
depreciation, amortization and impairment charges, and specific
non-cash charges, including but not limited to unrealized gain/loss
on derivative financial instruments, stock based compensation,
adjustment for equity accounted investees (to remove non-cash
charges), and corporate foreign exchange gain/loss. These
adjustments are made to exclude non-cash charges and other items
that are not reflective of ongoing earning capacity of the
operations.
Effective Q1 2021, the Company has updated the definition of
adjusted EBITDA to remove the corporate foreign exchange
gains/losses and interest income, while adding an adjustment for
equity accounted investees to remove the depreciation, amortization
and other non-cash items that are not reflective of the ongoing
earnings capacity of the operations. In accordance with IFRS,
certain jointly controlled investments are accounted for using
equity method accounting whereby the assets and liabilities of the
investment are presented in a single line item in the consolidated
balance sheet and net earnings from investments in equity accounted
investees are recognized within the infrastructure segment profit
or within the gross profit in the statement of operations. Cash
contributions and distributions from investments in equity
accounted investees represent the Company's share paid and received
in the period to and from the investments in equity accounted
investees. To assist in understanding and evaluating the
performance of these investments, the Company adjusts for its
proportionate share of select non-cash expenses, included in equity
accounted investees in adjusted EBITDA.
Prior period comparative figures have been restated in
accordance with the updated definition of adjusted EBITDA set out
above.
Noted below is the reconciliation to the most directly
comparable GAAP measures of the Company's segmented and
consolidated adjusted EBITDA for the three and nine months ended
September 30, 2021 and 2020:
Three months ended
September 30
|
Infrastructure
|
Marketing
|
Corporate
&
Adjustments
|
Total
|
($
thousands)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
Segment
Profit
|
102,774
|
93,267
|
13,528
|
23,437
|
-
|
-
|
116,302
|
116,704
|
Unrealized loss
(gain) on derivative financial instruments
|
|
-
|
2,249
|
(10,594)
|
-
|
-
|
2,249
|
(10,594)
|
General and
administrative
|
-
|
-
|
-
|
-
|
(9,238)
|
(7,947)
|
(9,238)
|
(7,947)
|
Adjustments to share
of profit from equity
accounted investees
|
1,403
|
2,662
|
-
|
-
|
-
|
-
|
1,403
|
2,662
|
Adjusted
EBITDA (1)
|
104,177
|
95,929
|
15,777
|
12,843
|
(9,238)
|
(7,947)
|
110,716
|
100,825
|
(1) Adjusted EBITDA for
periods prior to March 31, 2021 has been restated on the basis
described above
|
Nine months ended
September 30
|
Infrastructure
|
Marketing
|
Corporate
&
Adjustments
|
Total
|
($
thousands)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
Segment
Profit
|
328,622
|
281,185
|
25,907
|
103,517
|
-
|
-
|
354,529
|
384,702
|
Unrealized loss on
derivative financial instruments
|
-
|
-
|
11,635
|
4,744
|
-
|
-
|
11,635
|
4,744
|
General and
administrative
|
-
|
-
|
-
|
-
|
(26,645)
|
(25,247)
|
(26,645)
|
(25,247)
|
Adjustments to share
of profit from equity
accounted investees
|
1,937
|
(1,172)
|
-
|
-
|
-
|
-
|
1,937
|
(1,172)
|
Adjusted
EBITDA (1)
|
330,559
|
280,013
|
37,542
|
108,261
|
(26,645)
|
(25,247)
|
341,456
|
363,027
|
(1) Adjusted
EBITDA for periods prior to March 31, 2021 has been restated on the
basis described above
|
|
Three months ended
September 30,
|
($
thousands)
|
2021
|
2020
(1)
|
Net Income
|
35,996
|
17,550
|
|
|
|
Income tax
expense
|
11,018
|
1,514
|
Depreciation,
amortization, and impairment charges
|
39,425
|
44,416
|
Net finance
costs
|
15,612
|
38,063
|
Unrealized loss
(gain) on derivative financial instruments
|
2,249
|
(10,594)
|
Stock based
compensation
|
4,864
|
4,683
|
Adjustments to share
of profit from equity accounted investees
|
1,403
|
2,662
|
Corporate foreign
exchange loss
|
149
|
2,531
|
Adjusted
EBITDA (1)
|
110,716
|
100,825
|
|
|
|
|
(1) Adjusted
EBITDA for periods prior to March 31, 2021 has been restated on the
basis described above
|
|
Nine months ended
September 30,
|
($
thousands)
|
2021
|
2020
(1)
|
Net Income
|
101,136
|
108,867
|
|
|
|
Income tax
expense
|
29,287
|
32,320
|
Depreciation,
amortization, and impairment charges
|
132,606
|
124,856
|
Net finance
costs
|
46,383
|
80,726
|
Unrealized loss on
derivative financial instruments
|
11,635
|
4,744
|
Stock based
compensation
|
18,100
|
15,418
|
Adjustments to share
of profit from equity accounted investees
|
1,937
|
(1,172)
|
Corporate foreign
exchange loss (gain)
|
372
|
(2,732)
|
Adjusted
EBITDA (1)
|
341,456
|
363,027
|
|
|
|
|
(1) Adjusted
EBITDA for periods prior to March 31, 2021 has been restated on the
basis described above
|
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SOURCE Gibson Energy ULC