SECURE ANNOUNCES 2023 FOURTH QUARTER AND YEAR-END RESULTS

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Achieved record Q4 Adjusted EBITDA1 of $162 million ($0.56/basic share1) and $590 million Adjusted EBITDA in 2023 ($1.99/basic share)
Delivered $0.95/basic share1 in shareholder returns through dividends and share repurchases in 2023
Repurchased 3.5% of outstanding shares under the renewed NCIB that commenced in December 2023
Closed $1.150 billion asset sale to Waste Connections, Inc., on February 1, 2024, satisfying the requirements of the Competition Tribunal divestiture order
Obtained commercial support to double capacity at the newly constructed Clearwater terminal

CALGARY, AB, Feb. 26, 2024 /CNW/ – SECURE Energy Services Inc. (“SECURE” or the “Corporation”) (TSX:SES), a leading waste management and energy infrastructure company, reported today its operational and financial results for the three and twelve months ended December 31, 2023.

“2023 was an exceptional year for SECURE, marked by strong financial performance that underscores the stability and growth potential inherent in our core waste management and energy infrastructure operations,” said Rene Amirault, Chief Executive Officer of SECURE. “The successful conversion of $590 million of Adjusted EBITDA to $363 million of Discretionary Free Cash Flow1 during the year enabled us to execute on our capital allocation priorities.

“We delivered significant shareholder value in 2023, returning a total of $280 million to shareholders, or $0.95/basic share, through a combination of quarterly dividends and strategic share repurchases. Our opportunistic share buybacks throughout 2023 resulted in a 7% decrease in outstanding shares, contributing to an 11% improvement in Adjusted EBITDA per basic share over 2022. In addition, we successfully executed two critical infrastructure growth projects supported by long-term commercial agreements. These projects provided for the safe and reliable handling of production volumes for our customers, and consistent cash flows for SECURE across our business cycles. Notably, we accomplished these milestones while maintaining a Total Debt to EBITDA2 covenant ratio below 2.0x.

“We also advanced our strategy as a leader in waste management and energy infrastructure. The accretive multiple achieved from the mandated facilities divestiture to Waste Connections highlights the underlying value of SECURE’s business. Post-transaction closure, we maintain our market leadership in western Canada and North Dakota, leveraging our extensive facility network to expertly manage waste streams for energy and industrial customers. In 2023, we also strategically optimized our portfolio by divesting of non-core oilfield services business units that did not align with our core infrastructure strategy.

“The proceeds from the asset sale to Waste Connections has significantly improved our financial position, affording us capacity to enhance returns to shareholders and strategically expand in the industrial and energy waste markets. Our Board of Directors and management team continues to believe a substantial disparity exists between our intrinsic value and the current share price. The transaction valuation underscores our conviction that we should trade higher than the current multiple. Therefore, the Corporation remains committed to aggressive NCIB share repurchases, and we will evaluate various avenues, including the merits of a substantial issuer bid, to further return capital to shareholders.”

FOURTH QUARTER HIGHLIGHTS

Entered into a definitive agreement (the “Divestiture Agreement”) with Waste Connections, Inc. (through its wholly owned subsidiary) (“Waste Connections”) to sell the 29 facilities formerly owned by Tervita Corporation that were ordered to be divested by the Competition Tribunal for $1.075 billion in cash, plus $75 million for certain adjustments as provided in the Divestiture Agreement for total cash proceeds of $1.150 billion. On February 1, 2024, the Corporation closed the sale transaction with Waste Connections (the “Sale Transaction”), which was completed by R360 Environmental Solutions Canada Inc., an affiliate of Waste Connections.
Generated revenue (excluding oil purchase and resale) of $451 million, an increase of 12% from 2022.
Achieved Adjusted EBITDA of $162 million or $0.56 per basic share, an increase of 17% on a per basic share basis from 2022.
Recorded net income of $59 million or $0.20 per share, a 100% increase from $0.10 per basic share in 2022.
Increased funds flow from operations to $128 million, up 52% from 2022.
Sold the Corporation’s Projects business unit, focused on mobile yellow iron used for demolition and remediation. This sale completed the Corporation’s portfolio rationalization of non-core oilfield service focused business units that did not fit into SECURE’s core waste management and infrastructure strategy.
Paid a quarterly dividend of $0.10 per common share, which currently represents an attractive yield of 3.7% on our common shares compared to peers.
Renewed the Corporation’s normal course issuer bid (“NCIB”) effective December 14, 2023, which allows the Corporation to repurchase approximately 8.0% of the Corporation’s outstanding common shares. The Corporation has repurchased and cancelled 10,076,810 shares since the start of the new NCIB at a weighted average price per share of $9.97 for a total of $100 million.
Maintained a Total Debt to EBITDA covenant ratio of 1.9x.

ANNUAL HIGHLIGHTS

Generated revenue (excluding oil purchase and resale) of $1.647 billion, an increase of 7% from 2022.
Achieved Adjusted EBITDA of $590 million or $1.99 per basic share, an increase of 11% on a per basic share basis from 2022.
Recorded net income of $195 million or $0.66 per basic share, and increase of 12% on a per basic share basis from 2022.
Increased funds flow from operations to $474 million, up 18% from 2022.
Maintained an industry leading Adjusted EBITDA margin1 of 36%.
Completed and commissioned the expansion of our Montney water disposal infrastructure and Clearwater oil terminalling and gathering infrastructure projects safely, on time and on budget.
Repurchased and cancelled approximately 23 million common shares at a weighted average price per share of $7.10 for a total of $163 million.
Progressed our short-term target to reduce emissions associated with our operations by 15%. Since 2021, the Corporation has reduced Scope 1 and Scope 2 emissions at our waste processing facilities by 9% through energy conservation programs.
Recorded zero lost time injuries, and reduced our recordable injury frequency by 36% over 2022.
Introduced our WiQ application, a transparent e-ticketing system that ensures compliance and standardization for the documentation of waste and recyclables. WiQ provides an innovative solution that will help maximize the efficiency of compliant operations, assist with product logistics and provide the necessary information to support waste and emissions reporting for our customers.

The Corporation’s operating and financial highlights for the three and twelve months ended December 31, 2023 and 2022 can be summarized as follows:

Three months ended
December 31,

Twelve months ended 
December 31,

($ millions except share and per share data)

2023

2022

% change

2023

2022

% change

Revenue (excludes oil purchase and resale)

451

401

12

1,647

1,534

7

Oil purchase and resale

1,889

1,624

16

6,597

6,468

2

Total revenue

2,340

2,025

16

8,244

8,002

3

Adjusted EBITDA (1)

162

150

8

590

557

6

Per share ($), basic (1)

0.56

0.48

17

1.99

1.80

11

Per share ($), diluted (1)

0.55

0.48

15

1.97

1.78

11

Net income

59

32

84

195

184

6

Per share ($), basic

0.20

0.10

100

0.66

0.59

12

Per share ($), diluted

0.20

0.10

100

0.65

0.59

10

Funds flow from operations

128

84

52

474

403

18

Per share ($), basic

0.44

0.27

63

1.60

1.30

23

Per share ($), diluted

0.44

0.27

63

1.58

1.29

22

Discretionary free cash flow (1)

96

74

30

363

348

4

Per share ($), basic(1)

0.33

0.24

38

1.23

1.12

10

Per share ($), diluted (1)

0.33

0.24

38

1.21

1.11

9

Capital expenditures (3)

33

34

(3)

203

96

111

Dividends declared per common share

0.1000

0.1000

0.4000

0.1225

227

Total assets

2,844

2,840

2,844

2,840

Long-term liabilities

1,186

1,115

6

1,186

1,115

6

Common shares – end of year

287,627,549

309,381,452

Full story available on Benzinga.com


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