Tidewater Midstream and Infrastructure (TWM) Q3 2024 earnings summary

Executive summary

• Downstream operations at Prince George Refinery and HDRD facilities remained stable, though PGR throughput was down 9% year-over-year due to a third-party outage.

• Transitioned to in-house marketing of refined products after the end of the Cenovus offtake agreement, securing new sales agreements for most diesel and gasoline volumes for the remainder of 2024.

• Refining margins remain under pressure due to oversupply, weak demand, and subsidized U.S. renewable diesel imports; management is pursuing a trade remedy complaint.

• Completed a $122 million related party transaction with Tidewater Renewables, acquiring key assets and assuming related liabilities to address liquidity.

• Amended and restated senior credit facility, increasing revolving capacity to $175 million and adding a $150 million delayed draw term loan.

Financial highlights

• Q3 2024 consolidated adjusted EBITDA was CAD 29.2 million, down from CAD 37.5 million (pro forma) in Q3 2023.

• Net loss attributable to shareholders improved to $7.3 million in Q3 2024 from $22.9 million loss in Q3 2023.

• Net debt reduced to $566.5 million at September 30, 2024, from $953.0 million a year earlier.

• Total capital expenditures for Q3 2024 were $5.7 million, down from $39.3 million in Q3 2023.

• Distributable cash flow attributable to shareholders was $(1.2) million in Q3 2024, compared to $2.0 million in Q3 2023.

Outlook and guidance

• Full-year 2024 consolidated adjusted EBITDA is expected at the low end of the CAD 130-150 million guidance range.

• Maintenance capital forecast for 2024 revised down to CAD 25-30 million from previous CAD 35-40 million.

• Lower maintenance capital and revised EBITDA guidance have a net positive impact on anticipated free cash flow.

• Natural gas prices are expected to recover in 2025, with gas processing operations anticipated to resume.