SECURE Waste Infrastructure (SES) Q1 2025 earnings summary

Executive summary

• Delivered a solid Q1 2025 with stable earnings and cash flow, achieving Adjusted EBITDA of CAD 121 million (33% margin), supported by recurring waste volumes and a robust infrastructure-backed business model.

• Per-share adjusted EBITDA rose 24% year-over-year pro forma, driven by an 18% reduction in share count and strong infrastructure utilization.

• Core operations in Western Canada and North Dakota focus on industrial waste collection, processing, recycling, and disposal, with 80% recurring cash flows and 90% infrastructure-focused operations.

• Closed a $162 million acquisition of a metals recycling business, expanding scale and processing capabilities, and adopted a new corporate name to align with core waste and energy infrastructure focus.

• Increased 2025 organic growth capital program to CAD 125 million, supported by a 10-year commercial agreement with a senior Montney producer.

Financial highlights

• Net revenue for Q1 2025 was CAD 371 million, up 3% year-over-year, with net income of CAD 38 million (CAD 0.16 per share).

• Adjusted EBITDA of CAD 121 million, up 2% year-over-year pro forma; margin was 33%.

• Discretionary free cash flow was CAD 67 million, with a 55% conversion of adjusted EBITDA.

• Quarterly dividend of CAD 0.10 per share (3% yield), with annualized dividend expected at CAD 92 million.

• Market capitalization stands at $3.0B, with enterprise value at $3.6B as of March 31, 2025.

Outlook and guidance

• Maintained 2025 full-year adjusted EBITDA guidance of CAD 510–540 million, reflecting flexibility for macroeconomic volatility and the impact of not proceeding with a planned acquisition.

• Expecting discretionary free cash flow of $270–$300 million for 2025.

• Organic growth capital program increased by $40 million to $125 million, with major projects in water infrastructure and terminal expansions, mostly in the Montney region.

• Long-term fundamentals remain strong, with consistent energy demand, regulatory trends, and mandated liability reduction supporting recurring waste streams.

• Canadian crude oil supply projected to grow 2.5% annually to 2030, supporting stable production volumes.