Gibson Energy Reports 2023 Fourth Quarter and Full Year Results, a 5% Dividend Increase and Announces CEO Transition Plan
All financial figures are in Canadian dollars unless otherwise noted
"It was a record-breaking year, with Infrastructure Adjusted EBITDA and Distributable Cash Flow reaching all-time highs for the second consecutive year," said
Financial Highlights:
- Revenue of
$11,015 million for the full year, including$2,810 million in the fourth quarter, relatively consistent year over year primarily due to lower average commodity prices reducing revenue from the Marketing segment, offset by higher sales volumes and revenue from theGateway Terminal acquisition - Infrastructure adjusted EBITDA(1) of
$494 million for the full year, including$153 million in the fourth quarter, a$52 million or 12% increase over full year 2022, primarily due to theGateway Terminal acquisition - Marketing adjusted EBITDA(1) of
$145 million for the full year, including$28 million in the fourth quarter, a$27 million or 23% increase over full year 2022 principally due to the improved availability of location and storage-based opportunities for Crude Marketing - Adjusted EBITDA(1) on a consolidated basis of
$590 million for the full year, including$170 million in the fourth quarter, a$69 million or 13% increase over full year 2022, as result of the factors described above - Net Income of
$214 million for the full year, including$53 million in the fourth quarter, a$9 million or 4% decrease over full year 2022 due to acquisition and integration costs and higher finance costs relating to theGateway Terminal acquisition, partially offset by higher adjusted EBITDA(1) - Distributable Cash Flow(1) of
$386 million for the full year, including$103 million in the fourth quarter, a$30 million or 8% increase over full year 2022, a result of the factors described above - Dividend Payout ratio(2) on a trailing twelve-month basis of 61%, which is below its 70% – 80% target range
- Net debt to adjusted EBITDA(2) at
December 31, 2023 of 3.7x, above the Company's 3.0x – 3.5x target range due to adjusted EBITDA(1) including only five months of contribution from theGateway Terminal ; we expect the net debt to adjusted EBITDA(2) ratio to be temporarily elevated until twelve-months of adjusted EBITDA(1) from theGateway Terminal is reflected in the Company's net debt to adjusted EBITDA(2) ratio
(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. |
Strategic Developments and Highlights:
- Successfully closed the
US$1.1 billion acquisition of the South Texas Gateway terminal and fully transitioned the operations and maintenance functions from Buckeye to Gibson effectiveJanuary 1, 2024 - Placed the previously announced
Edmonton tank into service, in support of the TMX pipeline, on time, on budget and underpinned by a long-term, take-or-pay contract with an investment grade customer - Sanctioned the construction of two new tanks, representing 870,000 barrels of new tankage, at its
Edmonton Terminal underpinned by a 15 year take-or-pay and stable fee-based contract agreement with Cenovus Energy Inc., an investment grade, senior integrated oil sands customer - Released its 2022 Sustainability Report reaffirming its leadership in sustainability through top quartile rankings across key globally recognized ESG rating agencies
- Entered into a 15-year renewable power purchase agreement with Capstone Infrastructure Corporation Sawridge First Nation's Buffalo Atlee 2 and 4 wind farms, demonstrating Gibson's commitment to the low-carbon transition and achieving its emission reduction targets, including its Net Zero by 2050 goal
- Announced the additions of
Maria Hooper ,Khalid Muslih and post-quarter,Craig Richardson , to the Company's Board of Directors - Subsequent to the quarter, Gibson's Board of Directors approved a quarterly dividend of
$0.41 per common share, an increase of$0.02 per common share or 5%, beginning with the dividend payable in April
CEO Retirement:
Gibson also formally announced today,
"It has been a privilege to lead Gibson's talented team of employees through such a critical and transformative period," said
"On behalf of the Board, I want to thank Steve for his significant contributions and critical role he has played since 2017," said
Management's Discussion and Analysis and Financial Statements
The 2023 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 months and year ended
Earnings Conference Call & Webcast Details
A conference call and webcast will be held to discuss the 2023 fourth quarter and year-end financial and operating results at
The conference call dial-in numbers are:
- 416-764-8659 / 1-888-664-6392
- Conference ID: 69788065
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
- 416-764-8677 / 1-888-390-0541
- Replay Entry Code: 788065#
Supplementary Information
Gibson has also made available certain supplementary information regarding the 2023 fourth quarter and full year financial and operating results, available at www.gibsonenergy.com.
About Gibson
Gibson is a leading liquids infrastructure company with its principal businesses consisting of the storage, optimization, processing, and gathering of liquids and refined products. Headquartered in
Gibson shares trade under the symbol GEI and are listed on the
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking information and statements (collectively, forward-looking statements) including, but not limited to, statements concerning Gibson's dividend increase and payment, sanction and completion of incremental infrastructure projects and continued progress in Gibson's sustainability journey, including its Net Zero by 2050 goal. 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. The forward-looking statements reflect Gibson's beliefs and assumptions with respect to, among other things, dividend increase and payment, ability to achieve the anticipated benefits of the acquisition of the
For further information, please contact:
Investors:
Vice President, Capital Markets & Risk
Phone: (403) 992-6478
Email: beth.pollock@gibsonenergy.com
Media:
Director, Communications & Brand
Phone: (403) 827-6057
Email: wendy.robinson@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 years ended
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 and twelve months ended
Three months ended |
Infrastructure |
Marketing |
Corporate & |
Total |
||||
($ thousands) |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|
|
|
|
|
|
|
|
|
Segment Profit |
157,968 |
108,855 |
24,474 |
40,315 |
— |
— |
182,442 |
149,170 |
Unrealized (gain) loss on derivative financial instruments |
(5,377) |
— |
3,388 |
(3,000) |
— |
— |
(1,989) |
(3,000) |
General and administrative |
— |
— |
— |
— |
(10,893) |
(10,236) |
(10,893) |
(10,236) |
Adjustments to share of profit from equity accounted investees |
155 |
1,400 |
— |
— |
— |
— |
155 |
1,400 |
Other |
— |
— |
— |
— |
(34) |
— |
(34) |
— |
Adjusted EBITDA |
152,746 |
110,255 |
27,862 |
37,315 |
(10,927) |
(10,236) |
169,681 |
137,334 |
Years
ended |
Infrastructure |
Marketing |
Corporate and |
Total |
||||
($ thousands) |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
2023 |
2022 |
|
|
|
|
|
|
|
|
|
Segment Profit |
494,451 |
434,998 |
148,436 |
122,020 |
— |
— |
642,887 |
557,018 |
Unrealized gain on derivative financial instruments |
(4,637) |
— |
(3,484) |
(4,027) |
— |
— |
(8,121) |
(4,027) |
General and administrative |
— |
— |
— |
— |
(49,570) |
(40,196) |
(49,570) |
(40,196) |
Adjustments to share of profit from equity accounted investees |
4,448 |
7,442 |
— |
— |
— |
— |
4,448 |
7,442 |
Other |
— |
— |
— |
— |
184 |
742 |
184 |
742 |
Adjusted EBITDA |
494,262 |
442,440 |
144,952 |
117,993 |
(49,386) |
(39,454) |
589,828 |
520,979 |
|
Three months ended |
|
($ thousands) |
2023 |
2022 |
|
|
|
Net Income |
53,301 |
63,891 |
|
|
|
Income tax expense |
20,259 |
19,244 |
Depreciation, amortization, and impairment charges |
47,690 |
30,834 |
Net finance costs |
35,919 |
17,827 |
Unrealized gain on derivative financial instruments |
(1,989) |
(3,000) |
Corporate unrealized loss on derivative financial instruments (1) |
866 |
— |
Stock-based compensation |
5,600 |
5,116 |
Adjustments to share of profit from equity accounted investees |
155 |
1,400 |
Acquisition & integration costs |
2,083 |
— |
Corporate foreign exchange loss and other |
5,797 |
2,022 |
Adjusted EBITDA |
169,681 |
137,334 |
|
Years
ended |
|
($ thousands) |
2023 |
2022 |
|
|
|
Net Income |
214,211 |
223,245 |
|
|
|
Income tax expense |
71,123 |
66,890 |
Depreciation, amortization, and impairment charges |
142,478 |
144,479 |
Net finance costs |
116,276 |
64,939 |
Unrealized gain on derivative financial instruments |
(8,121) |
(4,027) |
Corporate unrealized loss on derivative financial instruments (1) |
1,296 |
— |
Stock based compensation |
20,944 |
20,543 |
Adjustments to share of profit from equity accounted investees |
4,448 |
7,442 |
Acquisition & integration costs |
22,042 |
— |
Corporate foreign exchange loss (gain) and other |
5,131 |
(2,532) |
Adjusted EBITDA |
589,828 |
520,979 |
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 |
Years
ended |
||
($ thousands) |
2023 |
2022 |
2023 |
2022 |
|
|
|
|
|
Cash flow from operating activities |
155,602 |
70,058 |
574,856 |
598,312 |
Adjustments: |
|
|
|
|
Changes in non-cash working capital and taxes paid |
7,487 |
62,733 |
(7,434) |
(81,576) |
Replacement capital |
(10,226) |
(6,857) |
(35,928) |
(22,241) |
Cash interest expense, including capitalized interest |
(34,456) |
(16,289) |
(100,133) |
(59,816) |
Acquisition & integration costs |
2,083 |
— |
22,042 |
— |
Lease payments |
(9,628) |
(7,767) |
(35,896) |
(35,397) |
Current income tax |
(7,917) |
(13,418) |
(31,717) |
(43,074) |
Distributable cash flow |
102,945 |
88,460 |
385,790 |
356,208 |
c) Dividend Payout Ratio
Years
ended |
||
|
2023 |
2022 |
Distributable cash flow |
385,790 |
356,208 |
Dividends declared |
236,907 |
215,446 |
Dividend payout ratio |
61 % |
60 % |
d) Net Debt to Adjusted EBITDA Ratio
|
Years
ended |
|
|
2023 |
2022 |
|
|
|
Long-term debt |
2,711,543 |
1,646,772 |
Lease liabilities |
62,005 |
71,700 |
Less: unsecured hybrid debt |
(450,000) |
(250,000) |
Less: cash and cash equivalents |
(143,758) |
(83,596) |
|
|
|
Net debt |
2,179,790 |
1,384,876 |
Adjusted EBITDA |
589,828 |
520,979 |
Net debt to adjusted EBITDA ratio |
3.7 |
2.7 |
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