Gibson Energy Inc T.GEI

Alternate Symbol(s): GBNXF

Energy Oil & Gas Refining & Marketing

Gibson Energy Inc. is a liquids infrastructure company. The Company’s principal businesses consist of the storage, optimization, processing, and gathering of liquids and refined products. Its segments include Infrastructure and Marketing. The Infrastructure segment includes a network of liquids infrastructure assets that include oil terminals, rail loading and unloading facilities, gathering pipelines, a crude oil processing facility, and other small terminals. The Marketing segment is involved in the purchasing, selling, storing, and optimizing of hydrocarbon products as part of supplying the Moose Jaw Facility and marketing its refined products, as well as helping to drive volumes through the Company’s key infrastructure assets. The Marketing segment also engages in optimization opportunities. The Company's operations are located across North America, with core terminal assets in Hardisty and Edmonton, Alberta, Ingleside, Texas, and including a facility in Moose Jaw, Saskatchewan.

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Gibson Energy Inc

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Post by retiredcfon Aug 01, 2023 8:28am

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Post# 35566449

TD

Gibson Energy Inc.

(GEI-T) C$21.47

First Glance: Q2/23 Results Event

August 1, 2023

Recommendation: BUY

Risk: MEDIUM

12-Month Target Price: C$26.00

12-Month Dividend (Est.): C$1.58

12-Month Total Return: 28.5%

Gibson Energy Inc. (GEI) reported Q2/23 AFFO/share of $0.58, above our estimate and recent consensus of $0.56, and above the Q2/22 AFFO/share of $0.50.

Impact: NEUTRAL

Q2/23 Results: Q2/23 results were above our expectations, driven by stronger- than-forecast performance in the Marketing business, partially offset by weaker Infrastructure results, which was affected by an environmental remedial provision of $16.7mm. After normalizing for the provision, Infrastructure results were largely in line with our estimates and were flat year-over-year, as earnings from equity investments were offset by higher power expenses and costs, as well as the absence of a one-time fee earned in the previous comparable quarter. Higher refined-product margins and increased opportunities in the crude marketing business lifted Marketing segment performance, which was ~$10mm higher than management's forecast of ~$25mm of Adjusted EBITDA that was communicated during the Q1/23 earnings conference call.
Share Repurchase Program Suspended: Following the announcement of the South Texas Gateway Terminal (STGT) acquisition, GEI has suspended its share- repurchase program after repurchasing one million shares for ~$22 million in Q2/23. Management will re-evaluate future share repurchases in its annual budgeting process for 2024.

Conference Call at 9:00 a.m. ET Today: Telephone: 416-764-8659 or 1-888-664-6392; Replay: 416-764-8677 or 1-888-390-0541; Passcode: 138840. On the conference call, we expect management to provide more visibility on its capital-spending plans and upcoming projects, updated timing on the close of the STGT transaction, as well as an outlook for the scale of marketing opportunities available in the next quarter and in 2023.