All financial figures are in Canadian dollars unless otherwise noted
CALGARY, Alberta, March 04, 2019 (GLOBE NEWSWIRE) — Gibson Energy Inc. (“Gibson” or the “Company”), (TSX: GEI), announced today its operating and financial results for the three months and fiscal year ended December 31, 2018.
“We are very pleased with the record financial and operational results Gibson delivered in 2018, as well as the steps we took to deliver on our strategy, including the sanctioning of projects to reach our growth targets through 2020,” said Steve Spaulding, President and Chief Executive Officer. “With stable cash flows from Infrastructure that continue to grow as projects are placed into service and a favorable market environment driving robust earnings from Wholesale, both our payout ratio and leverage were below our target ranges. We intend to maintain this momentum through 2019.”
- Infrastructure segment profit of $72 million in the fourth quarter contributed to 2018 full year performance of $283 million, a $48 million or 20% increase over full year 2017, with the increase primarily due to additional tankage entering service
- Wholesale segment profit of $81 million in the fourth quarter contributed to 2018 full year performance of $211 million, a $180 million increase over full year 2017, driven by improved sales prices and discounted feedstocks driving strong margins at the Moose Jaw Facility and in Crude Wholesale
- Adjusted EBITDA from continuing operations(1) of $134 million in the fourth quarter contributed to 2018 full year performance of $457 million, a $228 million increase over full year 2017
- Distributable cash flow from combined operations(2) of $84 million in the fourth quarter contributed to 2018 full year performance of $283 million, a $102 million increase over full year 2017, resulting in a payout ratio in 2018 of 67%, below the Company’s 70% to 80% target range, and compared to a payout ratio of 104% in 2017
Strategic Developments and Highlights:
- Secured infrastructure growth capital in 2018 and 2019 totaling approximately $500 million, above the top end of the Company’s growth capital target range and providing line of sight to exceeding the Company’s distributable cash flow per share growth target of 10% through to 2020
- Sanctioned the construction of four new tanks (2 million barrels) under long-term take-or-pay agreements at its Hardisty Terminal
- Secured further growth through the Viking Pipeline Project, the acceleration of the U.S. strategy and the expansion of the Moose Jaw Facility
- Advanced the divestiture of its non-core businesses, with the sales of U.S. Environmental Services business closing on May 3, 2018, Wholesale Propane closing on December 3, 2018 and non-Core Environmental Services North closing February 28, 2019, for proceeds of approximately $225 million. The disposition of Canadian Truck Transportation continues to progress, with aggregate proceeds expected to be around the midpoint of the Company’s target range
- Strengthened the balance sheet and remain fully funded for all sanctioned capital through a combination of disposition proceeds and retained distributable cash flow from combined operations, with Net Debt to Pro Forma Adjusted EBITDA at the of 2018 of 2.3x, below the Company’s 3.0x – 3.5x target range
(1) Adjusted EBITDA from continuing operations is defined in Gibson’s Management’s Discussion and Analysis (“MD&A”). See MD&A section “Results of Continuing Operations” for segment profit from continuing operations discussion, which is the most closely related GAAP measure and disclosed in note 1 of the consolidated financial statements.
(2) Distributable cash flow from combined operations is defined in Gibson’s MD&A. See MD&A sections “Liquidity and Capital Resources” and “Results of Discontinued Operations” for cash flow from operations discussion, which is the most closely related GAAP measure.
Management’s Discussion and Analysis and Financial Statements
The 2018 fourth quarter and year-end Management’s Discussion and Analysis and audited Consolidated Financial Statements provide a detailed explanation of Gibson’s operating results for the three months and fiscal year ended December 31, 2018, as compared to the three months and fiscal year ended December 31, 2017. These documents are available at www.gibsonenergy.com and at www.sedar.com.
2018 Fourth Quarter and Year-End Results Conference Call
A conference call and webcast will be held to discuss the 2018 fourth quarter and year-end financial and operating results at 7:00am Mountain Time (9:00am Eastern Time) on Tuesday, March 5, 2019.
The conference call dial-in numbers are:
- 478-219-0003 / 844-358-6759
- Participant Pass Code: 5241939
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 12, 2019, using the following dial-in numbers:
- 404-537-3406 / 855-859-2056
- Participant Pass Code: 5241939
Gibson has also made available certain supplementary information regarding the third quarter operational and financial results, available at www.gibsonenergy.com
Investor Day Webcast Details
Gibson is hosting an Investor Day host an Investor Day on the morning of April 2, 2019 in Toronto, during which members of the senior executive team will provide a discussion of the Company’s strategy, its operations, recent developments and future opportunities.
The Investor Day will be webcast beginning at 8:45am Eastern Time (6:45am Mountain Time) and will be available through Gibson’s website www.gibsonenergy.com or may be accessed directly at the following URL:
Gibson 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.
Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward-looking statements”) including, but not limited to, statements concerning management’s expectations with respect to the business and financial prospects and opportunities of the Company, the divestiture of Canadian Truck Transportation, including the timing thereof and the aggregate amount and use of proceeds from all divestitures, opportunities and areas for potential growth. All statements other than statements of historical fact are forward-looking statements. The use of any of the words ‘‘anticipate’’, ‘‘plan’’, ‘‘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. These 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. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. In addition, this news release may contain forward-looking statements and forward-looking information attributed to third party industry sources. The Company does not undertake any obligations to publicly update or revise any forward looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, the risks and uncertainties described in “Forward-Looking Statements” and “Risk Factors” included in the Company’s Annual Information Form dated March 4, 2019 as filed on SEDAR and available on the Gibson website at www.gibsonenergy.com.
This news release refers to certain financial measures that are not determined in accordance with IFRS. Distributable cash flow (“DCF”) per share is not a measure recognized under IFRS and does not have standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures reported by other entities. Management considers this to be an important supplemental measure of the Company’s performance and believes this measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in industries with similar capital structures. Distributable cash flow per share is used to assess the level of cash flow generated and to evaluate the adequacy of internally generated cash flow to fund dividends. Changes in non-cash working capital are excluded from the determination of distributable cash flow because they are primarily the result of fluctuations in product inventories or other temporary changes. Upgrade and replacement capital expenditures are deducted from distributable cash flow as there is an ongoing requirement to incur these types of expenditures. The Company may deduct or include additional items in its calculation of distributable cash flow; these items would generally, but not necessarily, be items of a non-recurring nature. Additional information about reconciliation of historical distributable cash flow to its most closely related IFRS measure, cash flow from operating activities can be found in our Management Discussion and Analysis (“MD&A”) available on SEDAR at www.sedar.com and on our website at www.gibsonenergy.com.
For further information, please contact:
Vice President, Strategy, Planning & Investor Relations
Phone: (403) 776-3146
|Selected Financial Information|
|Three months ended December 31||Years ended December 31|
|Continuing operations 2|
|Segment profit 4||$||153,569||$||71,387||$||487,087||$||261,758|
|Adjusted EBITDA 3,4||134,001||68,475||457,315||229,201|
|Cash flow from operating activities 4||262,044||37,371||527,086||175,272|
|Distributable cash flow 3,4,6||78,190||50,181||259,126||160,479|
|Growth capital expenditures 4||$||81,745||$||56,271||$||221,198||$||151,154|
|Combined operations 2|
|Combined Adjusted EBITDA 2,3,4||$||140,479||$||82,271||$||490,083||$||291,272|
|Distributable cash flow 3,4,6||$||84,123||$||73,556||$||282,517||$||180,493|
|Last Twelve Months – As at December 31|
|Debt and dividend payout ratios 2,5|
|Debt leverage ratio||2.3||4.0|
|Interest coverage ratio||6.7||3.7|
|Combined dividend payout ratio 6||67||%||104||%|
1 The current period results include the impacts from the adoption of new accounting standards as discussed on page 34 of the MD&A. Comparative
information has not been restated and, therefore, may not be comparable.
2 See definition of non-GAAP measures on pages 20 to 21 and 42. Combined Adjusted EBITDA and Combined distributable cash flow, represents the aggregated results of both continuing and discontinued operations.
3 See pages 21 to 22 and 28 to 29 for a reconciliation of Adjusted EBITDA to segment profit and distributable cash flow to cash flow from operations,
4 Comparative period information has been restated to reflect the impact of discontinued operations.
5 Refer to page 27 and 34 for more information on the ratio calculation and impact of new accounting standards on covenant calculations.
6 The distributable cash flow calculation was revised during 2018 and comparative information is restated, refer to page 29 for more information.