Q3 2024 Gibson Energy Inc Earnings Call Transcript
Key Points
- Gibson Energy Inc (GBNXF) reported a strong third quarter with an adjusted EBITDA of $151 million, driven by near-record contributions from the Infrastructure segment.
- The construction of two new tanks at the Edmonton Terminal is on schedule, expected to add 870,000 barrels of storage capacity by year-end.
- The company has started work on the Cactus II connection at the Gateway terminal, which will provide access to approximately 700,000 barrels a day of incremental Permian supply by Q3 2025.
- Gibson Energy Inc (GBNXF) maintains a strong financial profile with a leverage ratio of 3.2 times, within their target range, and a payout ratio of 65%, below their target range.
- The company is focused on disciplined growth and maximizing shareholder value, with a commitment to capital allocation priorities, including potential share repurchases.
- The Marketing segment's adjusted EBITDA was $14 million, below guidance and a decrease from the previous year, primarily due to weaker refined products results.
- The refined products segment faced challenges with softer-than-expected drilling fluid demand and tight heavy differentials.
- Gibson Energy Inc (GBNXF) anticipates modest Marketing segment performance in the fourth quarter due to low Western Canadian storage levels and reduced volatility.
- The company's distributable cash flow decreased by $5 million year-over-year and $13 million quarter-over-quarter, impacted by lower marketing results and higher replacement capital expenditures.
- Despite strong infrastructure performance, the company does not foresee buybacks in the fourth quarter unless there is business outperformance, due to current market conditions and financial principles.
Good morning, everyone, and welcome to the Gibson Energy's third-quarter 2024 conference call. Please be advised that this call is being recorded.
I would now like to turn the meeting over to Beth Pollock, Vice President, Capital Markets and Risk. Ms. Pollock, please go ahead.
Thank you, Therese. Good morning, and thank you for joining us to discuss our third quarter 2024 operational and financial results. Joining me on the call this morning from Gibson Energy are Curtis Philippon, President and Chief Executive Officer; and Sean Brown, Senior Vice President and Chief Financial Officer. We also have additional senior management team members in the room to help with questions and answers as required.
Listeners are reminded that today's call refers to non-GAAP measures, forward-looking information and is subject to certain assumptions and adjustments and may not be indicative of actual results. Descriptions and qualifications of such measures and information are set out in our investor
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