CALGARY, ALBERTA–(Marketwired – Nov. 1, 2016) –
All financial figures are in Canadian dollars
- Adjusted EBITDA1 of $63 million in the third quarter of 2016 represented a 41% increase over the second quarter of 2016 and was supported by record Infrastructure segment profit contribution of $52 million;
(1) Adjusted EBITDA is defined in Gibsons’ Management’s Discussion and Analysis.
- Capital expenditures were $65 million in the third quarter of 2016, of which $60 million was related to growth initiatives, primarily the terminal infrastructure expansions at Hardisty and Edmonton;
- The Company successfully advanced a number of growth initiatives including the commissioning of 500,000 barrels of new storage capacity at Hardisty during the third quarter;
- Subsequent to the end of the third quarter, the Company commissioned 300,000 barrels of new storage at Edmonton and all of the remaining expansion projects at Hardisty, consisting of 1.5 million barrels at Hardisty East and 900,000 barrels at Hardisty West;
- On July 20, 2016, the Company announced it had engaged a financial advisor to assist with a potential sale of the Company’s Industrial Propane segment; and
- On September 6, 2016, the Company announced it had received committed customer support for the construction of two new 400,000 barrel crude oil storage tanks and related pipeline connection infrastructure at the Company’s Edmonton Terminal. These tanks, which are expected to be in-service by the second quarter of 2018, are underpinned by a long-term, take-or-pay contract with a large, integrated, investment grade customer.
“I am pleased with the sequential improvements exhibited in our third quarter results and the successful progression of our growth initiatives,” said Stewart Hanlon, Gibsons’ President and Chief Executive Officer. “Our focus on cost controls and operational discipline over the past several quarters, as well as our strategy to concentrate on Infrastructure growth initiatives, has proven its merit in our third quarter financial results.”
Mr. Hanlon added “As a result of improved capital expenditure efficiencies, a number of the Hardisty expansion projects were commissioned under budget and well ahead of the expected in-service dates and, as a result, we were able to successfully contract to secure short term tenants for the tanks, as necessary, until such time as the long term take or pay contracts for those tanks commence later in 2017.”
Mr. Hanlon continued “We believe that a recovery is slowly building momentum, and, while we expect it to offer only a modest pace of improvement at this point, there is tremendous upside in our activity sensitive businesses which we can realize without a requirement to invest additional growth capital as the recovery progresses. The recent commissioning of new infrastructure projects provides good visibility to cash flow growth in 2017 and, reflecting on recent commercial negotiations, we expect similar support into 2018 as well.”
Management’s Discussion and Analysis and Financial Statements
The Third Quarter 2016 Management’s Discussion and Analysis and Consolidated Financial Statements provide a detailed explanation of Gibsons’ operating results for the three and nine months ended September 30, 2016, as compared to the three and nine months ended September 30, 2015. These documents are available at www.gibsons.com and at www.sedar.com.
2016 Third Quarter Results Conference Call
A conference call to discuss Gibsons’ third quarter results will be held at 7:00 a.m. MT (9:00 a.m. ET) on Wednesday, November 2, 2016, for interested investors, analysts and media representatives.
The conference call dial-in numbers are:
- 866-696-5910 from Canada and the US
- 416-340-2217 from Toronto and International
- Participant Pass Code: 9896429
Shortly after the call, an audio archive will be posted on the Investor/News section at www.gibsons.com. The call will also be recorded and available for playback 60 minutes after the meeting end time, until March 7, 2017, using the following dial in process:
- 905-694-9451 / 800-408-3053
- Pass code: 4543666
Gibsons is a Canadian-based midstream energy company with operations in most of the key hydrocarbon-rich basins in North America. For over 60 years, Gibsons has delivered integrated midstream solutions to customers in the oil and gas industry. With headquarters in Calgary, Alberta, the Company’s North American operations include the storage, blending, processing, transportation, marketing and distribution of crude oil, liquids and refined products. The Company also provides oilfield waste and water management services. Gibsons is the second largest industrial propane distribution company in Canada operating under the Canwest Propane and Stittco Energy brands.
Gibson Energy Inc. shares trade under the symbol GEI and are listed on the Toronto Stock Exchange. For more information, visit www.gibsons.com.