Tidewater Midstream and Infrastructure (TWM) Q4 2024 earnings summary

Executive summary

• Achieved another safe and reliable operational quarter, with consistent performance at downstream and midstream facilities despite scheduled maintenance and third-party pipeline outages impacting throughput at PGR and HDRD facilities.

• Net loss attributable to shareholders improved to $3.3 million in Q4 2024 from $331.8 million in Q4 2023, mainly due to reversal of prior impairment charges and absence of large asset sale gains from 2023.

• Transitioned to in-house marketing of all refined products after the expiration of the Cenovus offtake agreement, expanding the customer base and optimizing logistics.

• Completed several non-core asset sales and financings, raising over CAD 40 million from asset sales and CAD 290 million from financings, with proceeds used for deleveraging.

• Major operational milestones included refinancing convertible debentures, cost savings initiatives, asset sales, and the transition to in-house refined product marketing.

Financial highlights

• Q4 2024 consolidated adjusted EBITDA was $20.0 million, down from $21.4 million in Q4 2023; full-year 2024 adjusted EBITDA was $134.3 million, down from $162.9 million in 2023.

• Reported a net loss attributable to shareholders of CAD 3.3 million in Q4 2024, a significant improvement from a net loss of CAD 331.8 million in Q4 2023, mainly due to reversal of prior non-cash impairment charges.

• Distributable cash flow attributable to shareholders was $(3.1) million for 2024, compared to $(64.3) million in 2023.

• Net debt decreased to $577.6 million at year-end 2024 from $744.0 million at year-end 2023.

• Total capital expenditures for 2024 were $44.9 million, significantly lower than $292.6 million in 2023.

Outlook and guidance

• 2025 consolidated capital maintenance program expected to be CAD 15–20 million, primarily maintenance with minimal growth CapEx, reflecting the absence of a major turnaround.

• Management expects lower refining margins to persist until trade remedies address oversupplied diesel markets.

• Anticipates improved market conditions for renewable diesel and emission credits due to regulatory changes, tariffs, and tightening CI markets, with profitability at the RD facility expected to normalize to first-half 2020 levels as the year progresses.

• Anticipates market stabilization if duties are imposed on U.S. renewable diesel imports following ongoing trade investigations.

• Expects natural gas prices to recover in 2025, supporting the resumption of gas processing at Ram River as producer activity restarts.