All financial figures are in Canadian dollars unless otherwise noted
CALGARY, Alberta – Gibson Energy Inc. announced today its financial and operating results for the three months and fiscal year ended December 31, 2020.
“Gibson proved very resilient through a challenging year for our industry, a result of our strategic focus on long-term, stable Infrastructure cash flows, maintaining a strong balance sheet and not relying on variable businesses to fund our dividend nor capital program,” said Steve Spaulding, President and Chief Executive Officer. “Despite the challenges of COVID-19, we continued to grow our Infrastructure cash flows, including placing 1.5 million barrels of tankage at our Hardisty Terminal into service near the end of the year and advancing the DRU towards a mid-2021 in-service date. We also significantly progressed our ESG and Sustainability practice, publishing our inaugural Sustainability Report and achieving an A- rating on our first CDP submission.”
- Distributable cash flow(1) for the full year of $299 million, including $54 million in the fourth quarter, a $3 million or 1% decrease over full year 2019, due to a decreased contribution from the Marketing segment being largely offset by an increase in the Infrastructure segment
- Infrastructure segment profit for the full year of $374 million, including $93 million in the fourth quarter, a $60 million or 19% increase over the full year 2019 on a comparable basis(2), primarily due to additional tankage in service at Hardisty
- Marketing segment profit for the full year of $95 million, including a $9 million loss in the fourth quarter, a $100 million or 52% decrease over the full year 2019, driven by reduced margins as well as limited opportunities within the Crude Marketing business and reduced sales volumes in the Refined Products business
- Maintained a strong financial position, with Net Debt to Adjusted EBITDA(1) at December 31, 2020 of 2.8x, below the Company’s 3.0x – 3.5x target range, and remain fully-funded for all sanctioned capital
- Payout ratio(1) on a trailing twelve-month basis of 66%, below the Company’s 70% to 80% target range
Strategic Developments and Highlights:
- Advanced its Sustainability and ESG initiatives through the publishing of its inaugural Sustainability Report and climate change questionnaire submission to CDP (formerly Carbon Disclosure Project), the establishment of a dedicated Sustainability and ESG Committee chaired by Judy Cotte, a recognized expert on ESG and responsible investing, and entering a five year, $1 million partnership to support youth mental health in the community
- Placed three tanks, representing 1.5 million barrels of storage, into service at the Top of the Hill portion of the Hardisty Terminal on schedule in the fourth quarter with capital in-line with budget, increasing Gibson’s tankage in service at the Hardisty Terminal to approximately 13.5 million barrels, an increase of 12.5%
- Finalized long-term, take-or-pay agreements with ConocoPhillips Canada to underpin and sanction the initial 50,000 barrel per day of inlet bitumen capacity phase of the DRU, and have continued to progress its construction while tracking within target costs and towards an on-schedule in-service date in mid-2021
- Completed the transition to an Investment Grade capital structure with the issuance of $650 million of Senior Unsecured Medium Term Notes and $250 million of Hybrid Subordinated Notes and the redemption in full of the $600 million 5.25% Notes due 2024 and the $100 million Convertible Debentures due 2021, resulting in annualized interest savings of approximately $16 million over the remaining term of the redeemed notes
- Subsequent to the quarter, Gibson’s Board of Directors approved a quarterly dividend of $0.35 per common share, an increase of $0.01 per common share, beginning with the dividend payable in April
|(1)||Adjusted Earnings before Interest, Tax, Depreciation and Amortization and other adjustments (“Adjusted EBITDA”), Distributable Cash Flow 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 (“MD&A”). See definition and reconciliation of these of non-GAAP measures to the closest GAAP measures in sections in the MD&A titled “Summary of Quarterly Results” and “Distributable Cash flows”.|
|(2)||Comparisons made after adjusting for a $15 million future environmental remediation provision in the prior period and on a continuing operations basis.|
Management’s Discussion and Analysis and Financial Statements
The 2020 fourth quarter and year-end Management’s Discussion and Analysis and audited Consolidated Financial Statements provide a detailed explanation of Gibson’s financial and operating results for the three and twelve months ended December 31, 2020, as compared to the three and twelve months ended December 31, 2019. These documents are available at www.gibsonenergy.com and at www.sedar.com.
2020 Fourth Quarter and Year-End Results Conference Call
A conference call and webcast will be held to discuss the 2020 fourth quarter and year-end financial and operating results at 7:00am Mountain Time (9:00am Eastern Time) on Tuesday, February 23, 2021.
The conference call dial-in numbers are:
- 478-219-0003 / 844-358-6759
- Participant Pass Code: 1694776
This call will also be broadcast live on the Internet and may be accessed directly at the following URL:
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 3, 2021, using the following dial-in numbers:
- 404-537-3406 / 855-859-2056
- Participant Pass Code: 1694776
Gibson has also made available certain supplementary information regarding the 2020 fourth quarter and year-end financial and operating results, available at www.gibsonenergy.com.
Gibson Energy Inc. (“Gibson” or the “Company”), (TSX: GEI) is a Canadian-based oil infrastructure company with its principal businesses consisting of the storage, optimization, processing, and gathering of crude oil 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 also 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.