TD's Take For those interested.
Gibson Energy Inc. (GEI) reported Q1/21 combined AFFO/share of $0.44, slightly
above our estimate of $0.43, above the recent consensus of $0.39, and below the
Q1/20 AFFO/share of $0.59.
Impact: SLIGHTLY POSITIVE
Q1/21 Results: GEI's Q1/21 AFFO/share of $0.44 was slightly above our
estimate, with the year-over-year decline in the Marketing business not quite as
drastic as we had modeled and also spending on replacement capital was lower
than our estimate. Higher-than-forecasted current taxes were a partial offset. We
also note that Infrastructure adjusted EBITDA benefitted from a $7 million reversal
of an accrual in the current quarter relating to a regulatory matter.
Capital Spending and Financing Update: GEI continues to be fully funded for
all sanctioned capital and has maintained its financial position over the quarter,
ending the quarter with net debt to pro forma adjusted EBITDA, within its 3.0x
– 3.5x target range. GEI re-confirmed a mid-year commissioning and start of
operations for DRU as the project remains on-budget and on-schedule. GEI was
recently assigned an "AA" rating by MSCI ESG Research LLC for its Sustainability
and ESG efforts, which would represent the highest ranking among GEI's North
American peer group. On April 19, 2021, GEI became the first public energy
company in North America to fully transition its principal syndicated credit facility
into one with sustainability-linked terms, while extending the maturity of the $750
million facility a full five years into 2026.