All financial figures are in Canadian dollars unless otherwise noted
CALGARY, AB – Gibson Energy Inc. announced today its financial and operating results for the three and six months ended June 30, 2021.
“We are pleased to report another solid quarter from both an operational and financial perspective, with our Infrastructure segment performing in-line with our expected run-rate on a normalized basis and Marketing moderately above our initial outlook,” said Steve Spaulding, President and Chief Executive Officer. “Having resumed our commercial discussions with customers around the start of the year, these have now translated to the announcement of several new projects, including new tankage at Edmonton and the biofuels blending project, such that we expect to deploy $200 million in growth capital in 2021. We continue to advance several other opportunities and remain confident in our ability to deploy similar levels of capital going forward while maintaining the 5x to 7x EBITDA build multiples that we have consistently achieved over the past several years.”
- Revenue of $1,675 million in the second quarter, a $880 million or 111% increase over the second quarter of 2020, a result of higher commodity prices and volumes increasing contribution from the Marketing Segment
- Infrastructure Adjusted EBITDA(1) of $118 million in the second quarter, a $29 million or 32% increase over the second quarter of 2020, due to additional tankage in service at Hardisty and the benefit of a $20 million payment for the present value of the remaining term of a rail loading contract in the current quarter
- Marketing Adjusted EBITDA of $19 million in the second quarter, a $45 million or 71% decrease over the second quarter of 2020, driven by the availability of time-based opportunities created by significant volatility in commodity markets during the prior quarter as well as limited opportunities and reduced margins within the Crude Marketing business in the current quarter
- Adjusted EBITDA on a consolidated basis of $128 million, a $17 million or 12% decrease over the second quarter of 2020, due to the factors discussed above with G&A comparable between the two periods
- Net Income of $32 million in the second quarter, a $9 million or 22% decrease over the second quarter of 2020, largely a result of the factors described above
- Distributable cash flow of $92 million in the second quarter, a $2 million or 2% decrease over the second quarter of 2020, with a decreased contribution from the Marketing segment being offset by an increase in the Infrastructure segment and lower taxes in the current quarter
- Payout ratio on a trailing twelve-month basis of 73%, 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 June 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:
- Completed the construction of the DRU on-schedule and within expected capital costs
- Subsequent to the quarter, sanctioned the construction of a new tank, representing 435,000 barrels of storage, at its Edmonton Terminal underpinned by a long-term, take-or-pay and stable fee-based agreement with a new Investment Grade energy customer to the terminal
- Sanctioned the biofuels blending project, new tankage at Edmonton and several incremental projects since the start of the year, such that Gibson anticipates growth capital in 2021 of approximately $200 million, in addition to replacement capital of approximately $30 million
- Upgraded to an “AA” status in the MSCI ESG Ratings, denoting top quartile performance within their rated constituents, and added to both the S&P/TSX Composite ESG Index and the Sustainalytics Jantzi Social Index
- Became the first public energy company in North America to fully transition its principal syndicated credit facility into one with sustainability-linked terms, while extending the maturity of the $750 million facility to a full five years into 2026
|(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 six months ended June 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 second 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 six months ended June 30, 2021, as compared to the three and six months ended June 30, 2020. These documents are available at www.gibsonenergy.com and at www.sedar.com.
2021 Second Quarter Results Conference Call
A conference call and webcast will be held to discuss the 2021 second quarter financial and operating results at 7:00am Mountain Time (9:00am Eastern Time) on Wednesday, August 4, 2021.
The conference call dial-in numbers are:
- 416-764-8659 / 1-888-664-6392
- Conference ID: 57683564
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 August 18, 2021, using the following dial-in numbers:
- 416-764-8677 / 1-888-390-0541
- Replay Entry Code: 683564#
Gibson has also made available certain supplementary information regarding the 2021 second quarter 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.