SECURE Waste Infrastructure (SES) Q3 2024 earnings summary

Executive summary

• Shareholders approved a name change to SECURE Waste Infrastructure Corp., reflecting a strategic shift to waste management and energy infrastructure, effective January 1, 2025, with 80% of cash flows now recurring and 90% of business infrastructure-focused as of 2024.

• Q3 2024 delivered Adjusted EBITDA of $127 million ($0.53 per share), up 11% sequentially, with a 34% margin, driven by strong operational execution and robust customer demand.

• Net income reached $94 million ($0.39 per share), up 100% year-over-year, aided by lower interest costs and a one-time $30 million tax recovery.

• Share buybacks and dividends returned $77 million to shareholders in Q3, with a total of $612 million (19%) of shares repurchased year-to-date.

• Operates ~80 locations, including 75 facilities and 1,800 employees, with a leading market share in industrial waste management in Western Canada and North Dakota.

Financial highlights

• Q3 2024 net revenue was $374 million, down 12% year-over-year due to divestitures, but pro forma revenue increased on strong demand and higher pricing.

• Adjusted EBITDA margin was 34%, down from 37% last year, but stable sequentially.

• Funds from operations were $106 million, an 18% decrease year-over-year.

• Discretionary Free Cash Flow was $90 million, down 13% year-over-year, but up 6% per share due to share buybacks.

• Market capitalization at $3.2 billion and enterprise value at $3.6 billion as of September 30, 2024.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA guidance reaffirmed at $470–$490 million, with 80% tied to stable, recurring production-related waste streams.

• Preliminary 2025 guidance and capital plans to be provided in December 2024.

• $75 million organic growth capital planned for 2024, with major projects on track and some pre-spending for 2025.

• Poised for above-plan growth via M&A, brownfield, and greenfield expansion opportunities.

• Canadian crude oil supply expected to grow 2% annually through 2026, supporting organic growth in waste processing.