Tervita Corporation Announces Third Quarter 2020 Results
October 29, 2020
- Strong Q3 2020 results demonstrate the resiliency of our business, reflecting our continued focus on profitability and market share growth as well as our proactive actions to reduce costs.
- Q3 2020 Adjusted EBITDA of $56 million decreased from prior year by 14% as management cost saving initiatives and Canada Emergency Wage Subsidy (“CEWS”) moderated the impact of reduced activity and oil prices.
- Adjusted EBITDA Margin excluding CEWS remained strong and stable at 34%.
- Net Debt of $722 million, with a Net Debt to Adjusted EBITDA leverage of 3.39x. Net Debt was reduced by $42 million since Q2 2020 as cash balances increased from $31 million to $52 million during the quarter and our Credit Facility was fully undrawn.
- Generated Discretionary Free Cash Flow (“DFCF”) of $45 million despite continued challenging economic environment.
- Remain on track to achieve anticipated annualized structural cost savings of approximately $32 million, with $23 million to be realized in 2020.
- Successfully exited our United States (“US”) operations due to lower activity in the US and as part of our continued focus on capital efficiencies and internal hurdle rates.
- Expanded our total count of pipeline-connected facilities to 22 with the commissioning of a facility pipeline connection in the Viking play in central east Saskatchewan.
- Anticipate 2020 full year Adjusted EBITDA and DFCF of approximately $210 million and $75 million, respectively. Full year 2020 maintenance and total capital budget remains at approximately $25 million and $60 million, respectively.
- Achieved a milestone with the release of Tervita’s inaugural Sustainability Report highlighting our 2019 accomplishments and targets developed towards our commitment to sustainability.
CALGARY, AB, Oct. 29, 2020 – Tervita Corporation (“Tervita” or the “Company”) (TSX: TEV) announced today the detailed unaudited results for the three and nine months ended September 30, 2020 following positive preliminary results released on October 19, 2020. All financial figures are in millions of Canadian dollars unless otherwise noted.
“We’re pleased with the strong performance across our operations in the third quarter, demonstrating the resiliency of our production-based business and the continued stability in our Industrial Services business. Our continued focus on cost control and optimization of our locations helped to maintain a strong and stable Adjusted EBITDA Margin excluding CEWS of 34%,” said John Cooper, President and CEO. “Our Energy Services and Industrial Services business segments drove performance with increased Divisional EBITDA Margin over prior year even as we experienced revenue declines compared to prior year, with both segments also showing a meaningful recovery in revenue from Q2 2020.
“The swift actions we took early on in the downturn have positioned us for increased financial strength. During the third quarter we reduced our Net Debt as free cash flow generated in the quarter allowed us to repay the $15 million credit facility draw and increase our cash balance 68% to $52 million. In the third quarter we also completed the sale of our assets in the US as a result of our continued focus on capital efficiency. While this service line was a small part of our overall business it demonstrates our acute focus on ensuring all of our businesses continue to provide net positive cash flow.
“I remain extremely proud of our people, who continue to deliver top-quality environmental and waste management solutions to our customers under challenging conditions. We are confident that with our resilient business model and strengthened financial platform, we are well positioned to succeed and emerge even stronger when the economy recovers.”
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