RE:Question for 'tomatoThat's exactly what I mean. (I no longer really follow TWM having sold all my shares over the last year or so (???)). I prefer to use DCF/sh to judge a company's true ability to repay debt, pay for their growth capex, and increase dividends. I'm not an accountant or even particularly smart, so please don't just take my word for this, but don't want to leave your question unanswered.
They are following the new IFRS 16 rules that allow the exclusion of lease expenses of right of use assets. These were broadly implemented in ... 2019? EBITDA, all things being equal, rises as reported operating costs are lower. I couldn't tell you how much the new IFRS guidelines increased their EBITDA vs previous
I don't think that there is any accounting fraud happening at TWM, but I think it's deceptive to advertise EBITDA and debt / ebitda. As a small company they have a higher proportion of leased assets, railcars and pipeline tolls are what I'm thinking about specifically, but I also wonder if the co-gen they sold at Pipestone (the power/steam unit at the processing plant was sold to a third party and leased back to help finance the construction of the plant, don't know how far back you go with TWM) is accounted for this way. The gap between EBITDA and DCF has widened considerably over the years and that was a warning sign to me: as much as their EBITDA was growing, it wasn't flowing through to the balance sheet. To be clear, it isn't fraud or illegal, but it's deceptive AF and I bailed.
TWM is still cheap but I don't trust them to be good stewards of capital, they've changed course so many times since IPO and none of their strategies have worked out for shareholders. For the longest time I believed it to be just too small to get proper recognition, always on to the next thing. The renewable diesel plant is likely going to generate gobs of EBITDA but again I'm not sure that any of that money will find its way to shareholders or to repay debt. Issuing equity at this level is just a terrible look and does nothing to inspire confidence. Not saying I won't buy this back given the chance, but it isn't something I can park money at and forget it like I have with TOU or KEY.