TD comments on resultEvent Gibson Energy Inc. (GEI) reported Q3/23 AFFO/share of $0.60, above our estimate of $0.58 and the recent consensus of $0.53, but below the Q3/22 AFFO/share of $0.79.
Impact: NEUTRAL
Q3/23 Results: Q3/23 results were above our expectations, driven by strongerthan-forecast performance in the Infrastructure segment, as well as lower current income taxes, partially offset by slightly higher G&A expenses, replacement capital, and softer Marketing results. GEI's Infrastructure business benefited from an initial contribution from assets acquired as part of the South Texas Gateway Terminal transaction, while Marketing results were slightly lower than management's forecast of $25mm of Adjusted EBITDA communicated during the Q2/23 earnings conference call, resulting from lower refined-product margins and reduced opportunities in the crude marketing business.
2022 Sustainability Report Released and NCIB Renewed: In Q3/23, GEI renewed its NCIB and released its 2022 Sustainability Report, which provides an update on progress towards its ESG commitments. Select highlights include a 24.8% reduction (vs. 2020) in storage and handling Scope 1 and 2 emissions intensity and the publication of the Indigenous Peoples Policy. GEI also announced that it entered into a 15-year renewable power purchase agreement with Capstone Infrastructure Corporation and Sawridge First Nation's Buffalo Atlee 2 and 4 wind farms, where GEI will purchase power and environmental attributes from the wind farms. Construction for both wind projects is underway and is expected to supply over 50% of GEI's annual electricity needs, as well as advance GEI towards its 2025 target to reduce Scope 2 emissions by 50% and 2030 target to eliminate Scope 2 emissions completely.