All financial figures are in Canadian dollars
CALGARY, Aug. 7, 2012 /CNW/ - Gibson Energy Inc. ("Gibson" or the
"Company"), TSX: GEI, announced today strong results for the second
quarter of 2012 supported by increases in segment profit1 across four operating segments.
Adjusted EBITDA2 increased by 47% to $62.0 million for the three months ended June 30,
2012 compared to $42.1 million in the three months ended June 30,
2011. Adjusted EBITDA in the six months ended June 30, 2012 increased
by 35% to $133.8 million compared to $99.1 million in the six months
ended June 30, 2011. Pro Forma Adjusted EBITDA3 for the twelve months ended June 30, 2012 was $270.3 million.
Cash provided by operations for the three and six months ended June 30,
2012 was $56.1 million and $120.8 million, respectively, compared to
$23.5 million and $87.1 million in the three and six months ended June
30, 2011.
"Despite falling crude prices in the second quarter, our integrated
business model continues to deliver strong results," said Stewart
Hanlon, Gibson's President and Chief Executive Officer. "I am very
pleased with our results, especially considering the typical
seasonality impacts that occur in this quarter."
For the three months ended June 30, 2012, segment profit increased by
34% to $64.7 million compared to $48.2 million in the same period for
2011 driven by significant increases in the Company's Truck
Transportation, Marketing, Propane and NGL Marketing and Distribution,
and Terminals and Pipelines segments. Segment profit increased by 25%
to $143.1 million in the six months ended June 30, 2012 compared to
$114.7 million in the six months ended June 30, 2011, with large
increases in the Company's Terminals and Pipelines, Truck
Transportation and Marketing segments.
The majority of Gibson's operations experienced volume increases in the
second quarter of 2012 versus the same period in 2011. Higher volumes
were achieved at the Hardisty and Edmonton Terminals, injection
stations in the U.S., Truck Transportation, retail propane, roofing
flux and the crude oil from the Company's Marketing segment.
Other Highlights for the Three and Six Months Ended June 30, 2012:
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On May 1, 2012, the Company completed the acquisition of Fricken Fracken
Water Hauling Ltd. for approximately $4.6 million, expanding its market
presence in west central Saskatchewan and providing synergies with the
Company's custom treating and terminals business by providing water and
transportation services;
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(1)
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Segment profit is defined as revenue minus (i) cost of sales; and (ii)
operating costs. It excludes depreciation, amortization, impairment
charges, stock based compensation and corporate expenses.
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(2)
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Adjusted EBITDA is defined as consolidated net income (loss) before
interest expense, income taxes, depreciation, amortization, other
non-cash expenses and charges deducted in determining consolidated net
income (loss), including movement in the unrealized gains and losses on
the Company's financial instruments, stock based compensation expense,
impairment of goodwill and intangible assets, and non-cash inventory
write-downs. It also takes into account the impact of foreign exchange
movements in the Company's U.S. dollar denominated long-term debt,
management fees, debt extinguishment costs and other adjustments that
are considered non-recurring in nature.
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(3)
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Pro Forma Adjusted EBITDA differs from Adjusted EBITDA in that it also
includes the pro forma effect of acquisitions that took place in the
twelve month period as if the acquisitions took place at the beginning
of the twelve month period in which such acquisitions occurred.
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(4)
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Distributable cash flow is defined as cash flow generated from operating
activities excluding changes in non-cash working capital minus (i)
upgrade and replacement capital; (ii) interest paid; and (iii) current
income tax.
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On July 24, 2012, subsequent to quarter end, the Company completed the
acquisition of Mobile Propane Services Inc. for consideration of
approximately $4.9 million plus working capital. The acquisition
expands the Company's retail propane market presence in south east
Saskatchewan, provides synergies with the Company's current businesses
and provides it with an expanded client base;
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Capital expenditures, excluding acquisitions, were $87.9 million in the
six months ended June 30, 2012, of which $66.0 million related to
internal growth projects. The internal growth project expenditures are
primarily related to the construction of tankage and pipeline
connections at the Company's facilities, the expansion of the custom
treating and terminals business and the growth of the Truck
Transportation and Canwest fleets;
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The Company declared a dividend of $0.25 per common share in each of the
three month periods ended March 31, 2012 and June 30, 2012 for total
dividends of $24.9 million in the three months ended June 30, 2012 and
$49.7 million in the six months ended June 30, 2012. For the twelve
months ended June 30, 2012, distributable cash flow4 was $165.3 million resulting in a dividend payout ratio of 60%; and
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On May 24, 2012, through an amendment of its existing credit agreement,
the Company replaced its U.S.$645.0 million senior secured first lien
term loan facility with a U.S.$650.0 million senior secured first lien
term loan facility and re-priced such loan to reflect a decrease in the
interest rate from LIBOR plus 4.5% to LIBOR plus 3.75% and a decrease
in the LIBOR Floor from 1.25% to 1.0%. Also, the Company's U.S.$275.0
million revolving credit facility was expanded by U.S.$100.0 million to
U.S.$375.0 million.
The Company has also increased its 2012 Capital Expenditure Program from
$173 million to $225 million. This $52 million increase is due to
organic growth opportunities and acquisitions. "A key part of our
growth strategy is to continually expand our integrated asset base to
capture synergies," said Gibson's Chief Financial Officer, Donald
Fowlis. "This increase in our growth capital for 2012 will be funded
through cash on hand, expected cash flow from existing operations and
potential drawings on our revolving credit facility."
Management's Discussion and Analysis and Financial Statements
The Company's Management's Discussion and Analysis and the Condensed
Consolidated Financial Statements provide a more detailed explanation
of Gibson's operating results for the three and six months ended June
30, 2012, as compared to the three and six months ended June 30, 2011.
These documents are available at www.gibsons.com and at www.sedar.com.
2012 Second Quarter Results Conference Call
A conference call to discuss Gibson's second quarter results will be
held at 7:00 a.m. MT (9:00 a.m. ET) on Wednesday, August 8, 2012 for
interested investors, analysts and media representatives.
The conference call dial-in numbers are:
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866-696-5910 from Canada and the US
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416-340-2217 from Toronto and International
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Participant Pass Code: 7015666#
Shortly after the call, an audio archive will be posted on the Investor
Relations and Media section at http://www.gibsons.com.
The call will also be recorded for playback 60 minutes after the meeting
end time, until February 8, 2013, using the following dial in process:
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905-694-9451 / 800-408-3053
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Pass code: 8654994#
About Gibson
Gibson is one of the largest independent midstream energy companies in
Canada and a major participant in the crude oil transportation business
in the United States, and is engaged in the movement, storage,
blending, processing, marketing and distribution of crude oil,
condensate, natural gas liquids, and refined products. Gibson
transports hydrocarbons by utilizing its integrated network of
terminals, pipelines, storage tanks, and truck fleet located throughout
western Canada and the United States. Gibson is also involved in the
processing, blending and marketing of hydrocarbons, provision of water
disposal and oilfield waste management services and is the second
largest retail propane distribution company in Canada.
Forward-Looking Statements
Certain statements contained in this news release constitute
forward-looking information and statements (collectively,
"forward-looking statements"). These statements relate to future events
or the Company's future performance. 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. These statements
involve known and unknown risks, uncertainties and other factors that
may cause actual results or events to differ materially from those
anticipated in such forward-looking statements. No assurance can be
given that these expectations will prove to be correct and such
forward-looking statements included in this news release should not be
unduly relied upon. These statements speak only as of the date of this
news release. In addition, this news release may contain
forward-looking statements and forward-looking information attributed
to third party industry sources. The Company does not undertake any
obligations to publicly update or revise any forward looking statements
except as required by securities law. Actual results could differ
materially from those anticipated in these forward-looking statements
as a result of numerous risks and uncertainties including, but not
limited to, the risks and uncertainties described in "Forward-Looking
Statements" and "Risk Factors" included in the Company's Annual
Information Form dated March 6, 2012 as filed on SEDAR and available on
the Gibson website at www.gibsons.com.
This news release refers to certain financial measures that are not
determined in accordance with International Financial Reporting
Standards ("IFRS"). Adjusted EBITDA and Pro Forma Adjusted EBITDA are
not measures recognized under IFRS and do not have standardized
meanings prescribed by IFRS. 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 its
industries with similar capital structures. See ''Summary of Quarterly
Results" in the Company's MD&A for a reconciliation of EBITDA to net
income (loss), the IFRS measure most directly comparable to EBITDA, and
for a reconciliation of Adjusted EBITDA and Pro Forma Adjusted EBITDA
to EBITDA. Distributable cash flow is used to assess the level of cash
flow generated from ongoing operations and to evaluate the adequacy of
internally generated cash flow to fund dividends. See ''Distributable
Cash Flow" in the Company's MD&A for a reconciliation of distributable
cash flow to cash flow from operations, the IFRS measure most directly
comparable to distributable cash flow. Investors are encouraged to
evaluate each adjustment and the reasons the Company considers it
appropriate for supplemental analysis. Investors are cautioned,
however, that these measures should not be construed as an alternative
to net income (loss) determined in accordance with IFRS as an
indication of the Company's performance.
Second Quarter- Selected Financial Highlights
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Three months ended June 30
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Six months ended June 30
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2012
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2011
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2012
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2011
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(in thousands)
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Segment Profit:
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Terminals and Pipelines
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$19,970
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$17,075
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$43,023
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$33,811
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Truck Transportation
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20,950
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13,177
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40,312
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29,413
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Propane and NGL Marketing and Distribution
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5,585
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4,660
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20,919
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22,208
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Processing and Wellsite Fluids
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1,737
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3,777
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12,466
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14,905
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Marketing
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16,409
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9,501
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26,365
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14,327
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Total Segment Profit
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64,651
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48,190
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143,085
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114,664
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Statement of Cash Flows Data:
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Cash flows provided by (used in):
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Operating Activities
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$56,114
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$23,532
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$120,755
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$87,103
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Investing Activities
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(43,865)
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(34,331)
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(78,520)
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1,775
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Financing Activities
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(32,428)
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35,557
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(52,631)
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(18,769)
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Other Financial Data:
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Capital Expenditures:
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Internal Growth Projects
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$32,967
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$22,459
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$66,017
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$37,418
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Upgrade and Replacement Capital
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12,877
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13,149
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21,856
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21,617
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Acquisitions
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4,640
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4,640
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Adjusted EBITDA
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$62,044
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$42,147
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$133,833
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$99,086
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Twelve
months ended
June 30, 2012
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Pro Forma Adjusted EBITDA
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$270,261
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SOURCE: Gibson Energy Inc.