All financial figures are in Canadian dollars unless otherwise
noted
CALGARY, AB, Feb. 22, 2022 /PRNewswire/ - Gibson Energy
Inc. announced today its financial and operating results for the
three and twelve months ended December 31,
2021.
"We are pleased to report another strong year in 2021,
highlighted by Adjusted EBITDA from our Infrastructure segment
increasing 17% both relative to the prior year and as a compound
annual growth rate over the past five years," said Steve Spaulding, President and Chief Executive
Officer. "During the year, we were able to resume the sanction of
incremental growth projects while maintaining the 5x to 7x EBITDA
build multiples that we have consistently achieved over the past
several years. We also meaningfully advanced Sustainability and ESG
at Gibson, setting expanded 2025 and 2030 targets and adopting a
Net Zero by 2050 target, with our progress recognized by third
party ratings agencies, including being the only company in
North America in our sector to
receive a "AAA" rating from MSCI ESG Ratings and being only one of
four in our industry category globally to receive a Bronze Class
distinction from S&P Global."
Financial Highlights:
- Revenue of $7,211 million for the
full year, including $2,119 million
in the fourth quarter, a $2,273
million or 46% increase over full year 2020, a result of
higher commodity prices and volumes increasing contribution from
the Marketing Segment
- Infrastructure Adjusted EBITDA(1) of $436 million for the full year, including
$106 million in the fourth quarter, a
$63 million or 17% increase over full
year 2020, due to strong performance at the Hardisty and Edmonton Terminals, additional
tankage in service at Hardisty and
a partial year contribution from the DRU in 2021
- Marketing Adjusted EBITDA(1) of $43 million for the full year, including
$6 million in the fourth quarter, a
$61 million or 59% decrease over full
year 2020, reflecting a challenging environment for the Crude
Marketing business in 2021 and the significant market volatility
present in 2020
- Adjusted EBITDA(1) on a consolidated basis of
$445 million for the full year,
including $104 million in the fourth
quarter, is effectively in-line with full year 2020, with the
increased contribution from the Infrastructure segment offsetting
the decrease in opportunities within the Marketing segment
- Net Income of $145 million for
the full year, including $44 million
in the fourth quarter, a $24 million
or 20% increase over full year 2020, due to debt extinguishment
costs in 2020 and the factors described above
- Distributable Cash Flow(1) of $291 million for the full year, including
$64 million in the fourth quarter, an
$8 million or 3% decrease over full
year 2020, a result of the factors described above impacting
Adjusted EBIDTA, as well as higher income tax expense and lower
lease payments in 2021
- Dividend Payout ratio(2) on a trailing twelve-month
basis of 70%, at the low end of its 70% – 80% target range
- Net Debt to Adjusted EBITDA(2) at December 31, 2021 of 3.2x, within the Company's
3.0x – 3.5x target range
Strategic Developments and Highlights:
- Commenced operation of the DRU on-schedule and within expected
capital cost, with in-service in December
- Entered into a long-term agreement with Suncor Energy Inc. for
services at the Company's Edmonton Terminal, and sanctioned the
related Biofuels Blending Project on a fixed-fee basis and a
25-year term
- Sanctioned the construction of a new 435,000 barrels tank at
its Edmonton Terminal underpinned by a long-term, take-or-pay and
stable fee-based agreement with a new Investment Grade energy
customer
- Established expanded Sustainability and ESG targets focused
around reducing GHG emissions, including an ambitious Net Zero by
2050 target, diversity and inclusion, health and safety as well as
community impact targets, with an overarching goal of being a
Sustainability and ESG leader relative to Gibson's peers
- Subsequent to the quarter, Gibson's Board of Directors approved
a quarterly dividend of $0.37 per
common share, an increase of $0.02
per common share, beginning with the dividend payable in April
(1)
|
Adjusted EBITDA and
Distributable Cash Flow are non-GAAP financial measures. See the
"Specified Financial Measures" section of this release.
|
(2)
|
Net debt to Adjusted
EBITDA ratio and Dividend Payout ratio are non-GAAP financial
ratios. See the "Specified Financial Measures" section of this
release.
|
Management's Discussion and Analysis and Financial
Statements
The 2021 fourth quarter Management's Discussion
and Analysis and audited Condensed Consolidated Financial
Statements provide a detailed explanation of Gibson's financial and
operating results for the three and twelve months ended
December 31, 2021, as compared to the
three and twelve months ended December 31,
2020. These documents are available at
www.gibsonenergy.com and at http://www.sedar.com .
2021 Fourth Quarter and Year-End Results Conference
Call
A conference call and webcast will be held to discuss
the 2021 fourth quarter and year-end financial and operating
results at 7:00am Mountain Time
(9:00am Eastern Time) on Wednesday, February 23, 2022.
The conference call dial-in numbers are:
- 416-764-8659 / 888-664-6392
- Participant Pass Code: 90331437
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=1526313&tp_key=22362d8009
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 March 9, 2022, using the following dial-in
numbers:
- 416-764-8677 / 888-390-0541
- Participant Pass Code: 331437#
Supplementary Information
Gibson has also made
available certain supplementary information regarding the 2021
fourth quarter and full year 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; 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 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, 2022] as filed on SEDAR
and available on the Gibson website at
www.gibsonenergy.com.
Advisory Statement
Scope 1 emissions are direct
emissions from facilities owned and operated by Gibson.
Scope 2 emissions are indirect emissions from the generation
of purchased energy for Gibson's owned and operated
facilities.
Scope 3 emissions are indirect emissions not included in
Scope 1 or Scope 2 that Gibson indirectly impacts in its value
chain.
All references in this press release to Net Zero include
Scope 1 and Scope 2 emissions only and are only inclusive of the
equity portion of facilities Gibson owns and operates.
For further information, please contact:
Mark Chyc-Cies
Vice President, Strategy, Planning & Investor
Relations
Phone: (403) 776-3146
Email: mark.chyc-cies@gibsonenergy.com
Specified Financial Measures
This news release
refers to certain financial measures that are not determined in
accordance with GAAP, including non-GAAP financial measures and
non-GAAP financial ratios. Readers are cautioned that non-GAAP
financial measures and non-GAAP financial ratios do not have
standardized meanings prescribed by GAAP and, therefore, may not be
comparable to similar measures presented by other entities.
Management considers these to be important supplemental measures of
the Company's performance and believes these measures are
frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in industries
with similar capital structures.
For further details on these specified financial measures,
including relevant reconciliations, see the
"Specified Financial Measures" section of the Company's MD&A
for the year ended December 31, 2021,
which is incorporated by reference herein and is available on
Gibson's SEDAR profile at www.sedar.com and Gibson's website at
www.gibsonenergy.com.
a) Adjusted EBITDA
Effective Q1 2021, the Company 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 GAAP,
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 months and years ended
December 31, 2021 and 2020:
Three months ended
December 31
|
Infrastructure
|
Marketing
|
Corporate &
Adjustments
|
Total
|
($
thousands)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
Segment
Profit
|
105,307
|
93,239
|
15,360
|
(8,894)
|
-
|
-
|
120,667
|
84,345
|
Unrealized (gain) loss
on derivative financial instruments
|
-
|
-
|
(9,683)
|
4,874
|
-
|
-
|
(9,683)
|
4,874
|
General and
administrative
|
-
|
-
|
-
|
-
|
(7,836)
|
(7,834)
|
(7,836)
|
(7,834)
|
Adjustments to share of
profit from equity
accounted investees
|
614
|
503
|
-
|
-
|
-
|
-
|
614
|
503
|
Adjusted EBITDA
(1)
|
105,921
|
93,742
|
5,677
|
(4,020)
|
(7,836)
|
(7,834)
|
103,762
|
81,888
|
|
|
|
|
|
Years ended December
31
|
Infrastructure
|
Marketing
|
Corporate
&Adjustments
|
Total
|
($
thousands)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
2021
|
2020
(1)
|
Segment
Profit
|
433,929
|
374,424
|
41,267
|
94,623
|
-
|
-
|
475,196
|
469,047
|
Unrealized loss on
derivative financial instruments
|
-
|
-
|
1,952
|
9,618
|
-
|
-
|
1,952
|
9,618
|
General and
administrative
|
-
|
-
|
-
|
-
|
(34,481)
|
(33,081)
|
(34,481)
|
(33,081)
|
Adjustments to share of
profit from equity accounted investees
|
2,551
|
(669)
|
-
|
-
|
-
|
-
|
2,551
|
(669)
|
Adjusted EBITDA
(1)
|
436,480
|
373,755
|
43,219
|
104,241
|
(34,481)
|
(33,081)
|
445,218
|
444,915
|
|
(1) Adjusted EBITDA for periods prior to
March 31, 2021 has been restated on the basis described
above.
|
|
Three months ended
December 31,
|
($
thousands)
|
2021
|
2020
(1)
|
Net Income
|
43,917
|
12,442
|
|
|
|
Income tax expense
(recovery)
|
6,897
|
(2,951)
|
Depreciation,
amortization, and impairment charges
|
41,255
|
44,566
|
Net finance
costs
|
14,961
|
15,694
|
Unrealized (gain) loss
on derivative financial instruments
|
(9,683)
|
4,874
|
Stock-based
compensation
|
5,235
|
5,726
|
Adjustments to share of
profit from equity accounted investees
|
614
|
503
|
Corporate foreign
exchange loss
|
566
|
1,034
|
Adjusted EBITDA
(1)
|
103,762
|
81,888
|
|
|
|
Years ended December 31,
|
($
thousands)
|
2021
|
2020
(1)
|
Net Income
|
145,053
|
121,309
|
|
|
|
Income tax
expense
|
36,184
|
29,369
|
Depreciation,
amortization, and impairment charges
|
173,861
|
169,422
|
Net finance
costs
|
61,344
|
96,420
|
Unrealized loss on
derivative financial instruments
|
1,952
|
9,618
|
Stock-based
compensation
|
23,335
|
21,144
|
Adjustments to share of
profit from equity accounted investees
|
2,551
|
(669)
|
Corporate foreign
exchange loss (gain)
|
938
|
(1,698)
|
Adjusted EBITDA
(1)
|
445,218
|
444,915
|
|
(1)
Adjusted EBITDA for periods prior to
March 31, 2021 has been restated on the basis described
above.
|
b) Distributable Cash Flow
The following is a reconciliation of distributable cash flow
from operations to its most directly comparable GAAP measure, cash
flow from operating activities:
|
Three months ended
December 31,
|
Years ended December
31,
|
($
thousands)
|
2021
|
2020
|
2021
|
2020
|
Cash flow from
operating activities
|
3,186
|
44,940
|
216,806
|
459,551
|
Adjustments:
|
|
|
|
|
Changes in non-cash
working capital and taxes paid
|
94,678
|
31,253
|
212,825
|
(19,109)
|
Replacement
capital
|
(8,399)
|
(5,069)
|
(22,600)
|
(22,751)
|
Cash interest expense,
including capitalized interest
|
(14,149)
|
(11,618)
|
(54,218)
|
(53,557)
|
Lease
payments
|
(7,008)
|
(10,764)
|
(36,694)
|
(44,967)
|
Current income
tax
|
(3,912)
|
5,354
|
(25,046)
|
(20,279)
|
Distributable cash
flow
|
64,396
|
54,096
|
291,073
|
298,888
|
c) Dividend Payout Ratio
Years ended December
31,
|
|
2021
|
2020
|
Distributable cash
flow
|
291,073
|
298,888
|
Dividends
declared
|
205,154
|
198,667
|
Dividend payout
ratio
|
70%
|
66%
|
d) Net Debt To Adjusted EBITDA Ratio
|
Years ended and as
at December 31,
|
|
|
2021
|
2020
|
|
|
|
|
Long-term
debt
|
|
1,660,609
|
1,449,481
|
Lease
liabilities
|
|
81,779
|
102,742
|
Less: unsecured hybrid
debt
|
|
(250,000)
|
(250,000)
|
Less: cash and cash
equivalents
|
|
(62,688)
|
(53,676)
|
|
|
|
|
Net debt
|
|
1,429,700
|
1,248,547
|
Adjusted
EBITDA
|
|
445,218
|
444,915
|
|
|
|
|
Net debt to adjusted
EBITDA ratio
|
|
3.2
|
2.8
|
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SOURCE Gibson Energy Inc.