All financial figures are in Canadian dollars unless otherwise
noted
CALGARY, AB, May 2, 2022 /PRNewswire/ - Gibson Energy
Inc. announced today its financial and operating results for the
three months ended March 31,
2022.
"We are pleased to report a strong start to 2022 from both an
operational and financial perspective, with the Infrastructure
segment delivering another steady quarter, Marketing performance
slightly above our outlook and the continued advancement of
numerous discussions around the potential sanction of tankage,
additional phases of the DRU and energy transition-aligned
opportunities," said Steve
Spaulding, President and Chief Executive Officer. "We remain
focused on other key aspects of our business including, advancing
sustainability and ESG at Gibson, continuing to maintain a very
solid financial position, as well as returning capital to
shareholders through the repurchase of $22
million in Gibson common shares through the end of April and
increasing our dividend by six percent during the quarter."
Financial Highlights:
- Revenue of $2,688 million in the
first quarter, a $1,079 million or
67% increase over the first quarter of 2021, a result of higher
commodity prices and volumes increasing contribution from the
Marketing segment
- Infrastructure Adjusted EBITDA(1) of $109 million in the first quarter, in-line with
the first quarter of 2021, with an increase from the DRU being
in-service in the current quarter largely offsetting the first
quarter of 2021 having benefitted from the reversal of an accrual
pertaining to a regulatory matter
- Marketing Adjusted EBITDA(1) of $21 million in the first quarter, a $17 million increase over the first quarter of
2021, reflecting a strengthening environment for Refined Products
and the Crude Marketing business benefitting from increased market
volatility
- Adjusted EBITDA(1) on a consolidated basis of
$121 million in the first quarter, an
$18 million or 17% increase over the
first quarter of 2021, as result of the factors described
above
- Net Income of $52 million in the
first quarter, a $19 million or 59%
increase over the first quarter of 2021, due to the factors
described above partly offset by higher income tax expense in the
current quarter
- Distributable Cash Flow(1) of $79 million in the first quarter, a $15 million or 24% increase over the first
quarter of 2021, a result of the factors described above
- Dividend Payout ratio(2) on a trailing twelve-month
basis of 68%, below Gibson's 70% – 80% target range
- Net Debt to Adjusted EBITDA ratio(2) at March 31, 2022 of 2.7x, below the Company's 3.0x
– 3.5x target range
Strategic Developments and Highlights:
- Repurchased 776,100 shares for an aggregate $19 million in the first quarter of 2022, with
additional repurchases subsequent to the quarter to reach
$22 million year to date, reflecting
the Company's commitment to both its capital allocation philosophy
and desire to return capital to shareholders given its strong
financial position
- Announced that Gibson's Board of Directors approved a quarterly
dividend of $0.37 per common share,
an increase of $0.02 per common share
or 6%, beginning with the dividend payable in April
- Added by Global Listed Infrastructure Organization to its
benchmark Index, where its member-investors across the world manage
approximately US$145 billion in
assets
- Subsequent to the quarter, placed the Biofuels Blending Project
at its Edmonton Terminal into service ahead of schedule and within
budgeted capital on a fixed-fee basis and a 25-year term
- Subsequent to the quarter, renewed the Company's principal
$750 million syndicated credit
facility, which features sustainability-linked terms, extending its
maturity into 2027
___________________________________
|
(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 2022 first 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 months ended March 31, 2022, as compared to the three months
ended March 31, 2021. These documents
are available at www.gibsonenergy.com and at www.sedar.com.
Earnings Conference Call & Webcast Details
A
conference call and webcast will be held to discuss the 2022 first
quarter financial and operating results at 7:00am Mountain Time (9:00am Eastern Time) on Tuesday, May 3, 2022.
The conference call dial-in numbers are:
- 416-764-8659 / 1-888-664-6392
- Conference ID: 08819166
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=1540212&tp_key=c5893fac9b
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 May 17, 2022, using the following dial-in
numbers:
- 416-764-8677 / 1-888-390-0541
- Replay Entry Code: 819166#
Annual General and Special Meeting & Webcast
Details
Gibson is holding its annual meeting of shareholders
on Tuesday, May 3, 2022 at
10:00am Mountain Time (12:00
noon Eastern Time). Due to the
ongoing nature of the COVID-19 pandemic, this meeting will be held
as a virtual-only meeting conducted via live audio webcast to
ensure the upmost safety for our attendees. Shareholders will have
an equal opportunity to participate at the virtual-only meeting
regardless of their geographic location. Participants are
encouraged to register for the live audio webcast at least 10
minutes prior to the presentation start time.
Following the conclusion of the formal proceedings of Gibson's
annual shareholder meeting, Mr. Steve
Spaulding, President and Chief Executive Officer, will
address shareholders and provide brief remarks on the current state
of the business and discuss the highlights of the Company's key
initiatives.
The live audio webcast can be accessed using the following
URL:
- https://web.lumiagm.com/453779509
- Password: gibson2022
The webcast will remain accessible for a 12-month period at the
above URL.
Additionally, information and materials related to the annual
general meeting of shareholders can be accessed using the following
URL:
-
https://www.gibsonenergy.com/investors/shareholder-information/2022-annual-special-meeting-of-shareholders/
Supplementary Information
Gibson has also made
available certain supplementary information regarding the 2022
first 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; 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 demand for crude oil and petroleum
products and Gibson's operations generally; the Company's ability
to successfully implement the plans and programs disclosed in
Gibson's strategy, including advancing energy transition-aligned
opportunities and its sustainability and ESG goals 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.
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 press 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 period ended
March 31, 2022, 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
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
March 31, 2022 and 2021:
Three months ended
March 31
|
Infrastructure
|
Marketing
|
Corporate &
Adjustments
|
Total
|
($
thousands)
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
106,977
|
108,275
|
30,648
|
6,834
|
-
|
-
|
137,625
|
115,109
|
Unrealized (gain) loss
on derivative financial
instruments
|
-
|
-
|
(10,040)
|
(3,584)
|
-
|
-
|
(10,040)
|
(3,584)
|
General and
administrative
|
-
|
-
|
-
|
-
|
(8,936)
|
(8,732)
|
(8,936)
|
(8,732)
|
Adjustments to share of
profit from equity
accounted investees
|
2,011
|
269
|
-
|
-
|
-
|
-
|
2,011
|
269
|
Adjusted
EBITDA
|
108,988
|
108,544
|
20,608
|
3,250
|
(8,936)
|
(8,732)
|
120,660
|
103,062
|
|
Three months ended
March 31,
|
($
thousands)
|
2022
|
2021
|
|
|
|
Net Income
|
51,970
|
32,777
|
|
|
|
Income tax expense
(recovery)
|
16,002
|
8,084
|
Depreciation,
amortization, and impairment charges
|
38,439
|
41,284
|
Net finance
costs
|
14,921
|
14,988
|
Unrealized (gain) loss
on derivative financial instruments
|
(10,040)
|
(3,584)
|
Stock-based
compensation
|
6,155
|
8,952
|
Adjustments to share of
profit from equity accounted investees
|
2,011
|
269
|
Corporate foreign
exchange loss
|
1,202
|
292
|
Adjusted
EBITDA
|
120,660
|
103,062
|
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
March 31,
|
($
thousands)
|
2022
|
2021
|
|
|
|
Cash flow from
operating activities
|
305,736
|
43,577
|
Adjustments:
|
|
|
Changes in
non-cash working capital and taxes paid
|
(190,653)
|
54,981
|
Replacement capital
|
(2,168)
|
(2,383)
|
Cash
interest expense, including capitalized interest
|
(13,619)
|
(13,074)
|
Lease
payments
|
(10,596)
|
(10,700)
|
Current
income tax
|
(9,581)
|
(8,648)
|
Distributable cash
flow
|
79,119
|
63,753
|
|
Twelve months ended March 31,
|
($ thousands)
|
2022
|
Cash flow from operating
activities
|
478,965
|
Adjustments:
|
|
Changes in non-cash
working capital and taxes paid
|
(32,809)
|
Replacement
capital
|
(22,385)
|
Cash interest expense,
including capitalized interest
|
(54,763)
|
Lease
payments
|
(36,590)
|
Current income
tax
|
(25,979)
|
Distributable cash flow
|
306,439
|
c) Dividend Payout
Ratio
|
Twelve months ended
March 31,
|
|
2022
|
2021
|
Distributable cash
flow
|
306,439
|
276,692
|
Dividends
declared
|
208,463
|
200,222
|
Dividend payout
ratio
|
68%
|
72%
|
d) Net Debt To Adjusted EBITDA
Ratio
|
Twelve months ended
March 31,
|
|
|
2022
|
2021
|
|
|
|
|
Long-term
debt
|
|
1,480,033
|
1,507,476
|
Lease
liabilities
|
|
73,437
|
94,477
|
Less: unsecured hybrid
debt
|
|
(250,000)
|
(250,000)
|
Less: cash and cash
equivalents
|
|
(54,129)
|
(55,729)
|
|
|
|
|
Net debt
|
|
1,249,341
|
1,296,224
|
Adjusted
EBITDA
|
|
462,816
|
430,291
|
|
|
|
|
|
|
|
|
Net debt to adjusted
EBITDA ratio
|
|
2.7
|
3.0
|
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SOURCE Gibson Energy Inc.