Tidewater Midstream and Infrastructure Ltd T.TWM

RE:WHAT happened here?????

[wynner]

Tidewater Midstream and Infrastructure Ltd. (TWM-T; C$1.11; SO) Higher Renewable Diesel Costs Weigh on Shares

OUR TAKE: Negative. Tidewater Midstream's shares were very weak (-9%) following Q4 results, where it increased the cost of its associated renewable diesel facility (HDRD) by $82m. The higher capital cost of the project introduces some funding risk at Tidewater Renewables (LCFS), which holds the HDRD and which Tidewater Midstream has a 69% interest. Our estimates come down materially in 2023 to reflect a slower ramp up of
the HDRD as well as higher maintenance capital expenditures. Our sum of the parts target price moves down to $1.30 from $1.50 to reflect the higher capital cost and lower estimates. We see considerable valuation expansion potential in the shares as the HDRD enters service and the company quickly moves down leverage. In addition, any asset sales or other transactions that highlight the value of its asset base could be well received.