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Gibson Energy leverage falls below target with record adjusted EBITDA
By Devika Patel
Knoxville, Tenn., March 5 – Gibson Energy Inc. cut its leverage to 2.3x from 4x during the course of 2018, and the company reported record high adjusted EBITDA and distributable cash flow for the year.
The company has reduced its leverage to below its target level, so management sees no need to continue focusing on debt reduction.
“Our payout and leverage ratios are now below target levels, and we’re fully funded with ample ability to fund more capital,” senior vice president and chief financial officer Sean Brown said Tuesday on the company’s earnings conference call for the fourth quarter and year ended Dec. 31.
“Our net debt to EBITDA improved from 4x to 2.3x [during the year], with EBITDA increasing and also our net indebtedness decreasing by about C$145 million.
“At the end of the quarter, our year-end leverage is at 2.3x, so [there’s] really not a focus on reducing debt.
“Looking forward, we remain fully funded for all our capital projects without the need for external equity.”
Adjusted EBITDA was C$134 million in the fourth quarter. For the full year, adjusted EBITDA was C$457 million, a C$228 million increase over full-year 2017.
Distributable cash flow was C$84 million in the fourth quarter. For the full year, distributable cash flow was C$283 million, a C$102 million increase over full-year 2017.
“We had a very strong 2018, setting new highwater marks for both adjusted EBITDA and distributable cash flow for the year,” Brown said.
“Adjusted EBITDA from continuing operations of C$457 million was effectively double the comparable result in 2017.”
Gibson Energy is a Calgary, Alta., midstream energy company.
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