SECURE Waste Infrastructure (SES) Q1 2025 earnings summary

Executive summary

• Delivered stable Q1 2025 earnings and cash flow despite recessionary concerns and lower commodity prices, supported by recurring waste volumes and a critical infrastructure-backed business model.

• Adjusted EBITDA reached CAD 121 million with a 33% margin, and per-share adjusted EBITDA rose 24% year-over-year pro forma, driven by an 18% reduction in share count and strong infrastructure utilization.

• Core operations in Western Canada and North Dakota focus on industrial waste collection, processing, recycling, and disposal, with 80% recurring cash flows and 90% infrastructure-focused operations.

• Completed the $162 million acquisition of a metals recycling company in Edmonton, expanding scrap metal processing capacity and regional access.

• Announced a substantial issuer bid to repurchase up to CAD 200 million in shares, following $79 million in share repurchases under the NCIB in Q1.

Financial highlights

• Q1 2025 net revenue was CAD 371 million, up 3% year-over-year, with net income of CAD 38 million or CAD 0.16 per share.

• Adjusted EBITDA of CAD 121 million, up 2% year-over-year pro forma, with a 33% margin; discretionary free cash flow was CAD 67 million, with a 55% conversion of adjusted EBITDA.

• Market capitalization stands at $3.0B, with enterprise value at $3.6B as of March 31, 2025.

• Declared $23 million in dividends for the quarter, with a quarterly dividend of CAD 0.10 per share (3% yield) and annualized dividend expected at CAD 92 million.

• Net cash from operating activities was $81 million, with $68 million invested in property, plant, and equipment.

Outlook and guidance

• Maintained 2025 full-year adjusted EBITDA guidance of CAD 510–540 million, reflecting flexibility for macroeconomic volatility and the impact of not proceeding with a planned acquisition.

• 2025 organic growth capital program of $125M targets water disposal infrastructure, oil terminal expansion, and facility upgrades, with most spend in the Montney region.

• Long-term demand growth expected for recycled steel and waste management, supported by regulatory trends and green transition initiatives.

• Canadian crude oil supply projected to grow 2.5% annually to 2030, supporting stable production volumes.

• Management notes seasonal slowdowns in Q2 due to spring break-up and expects quarterly fluctuations in operating results and working capital.