Tervita Corporation
Tervita Corporation Provides Positive Preliminary Third Quarter Results, Full Year 2020 Financial Guidance and Credit Facility Amendment Update
CALGARY, AB, Oct. 19, 2020 /CNW/ - Tervita Corporation ("Tervita" or the "Company") (TSX: TEV) announced today its preliminary unaudited financial and operating results for the three months ended September 30, 2020 with full year Adjusted EBITDA1 guidance and provided an update on the Company's Credit Facility amendment.
Highlights of the preliminary financial results include:
- Q3 2020 Adjusted EBITDA1 and Discretionary Free Cash Flow ("DFCF") 1 of $56 million2 and $45 million, respectively, driven by ongoing recovery in our Energy Services business, stability and strength provided by Industrial Services, and continued focus on cost discipline and efficiencies.
- Q3 2020 Adjusted EBITDA Margin1 excluding Canada Emergency Wage Subsidy ("CEWS")2,3 remained strong and stable compared to prior year at 34%.
- Our Energy Services business generated Divisional EBITDA1 of $44 million in Q3 2020 with a 58% Divisional EBITDA Margin1,3 driven largely by increased production-based revenues. The Industrial Services business continued to deliver stable results with $11 million of Q3 2020 Divisional EBITDA1 and a 20% Divisional EBITDA Margin1,3.
- Net Debt1 of $722 million at the end of the quarter with an undrawn credit facility and cash of $52 million. Net Debt to Adjusted EBITDA1,4 was 3.4x at September 30, 2020.
- Anticipated 2020 full year Adjusted EBITDA1 and DFCF1 of approximately $210 million2 and $75 million, respectively. Full year 2020 maintenance and total capital budget remains at approximately $25 million and $60 million, respectively.
- Adjusted EBITDA1 for 20215 is anticipated to exceed 2020 Adjusted EBITDA1 excluding CEWS2 allowing Tervita to continue to reduce leverage.
"We are extremely pleased to announce such strong third quarter preliminary results and full year guidance that underscore the stability and resiliency in our production-based business and continued strong performance in our Industrial Services business segment," said John Cooper, President and CEO. "While 2020 has posed challenges with the COVID-19 pandemic and economic downturn, our preliminary Q3 results highlight our continued business resiliency and exhibit the strength we had forecast for the second half of the year."
Looking forward to the remainder of 2020 and into 2021, Tervita expects this positive momentum to continue. The Company currently anticipates Adjusted EBITDA in 20215 to exceed 2020 Adjusted EBITDA excluding CEWS, driven by contributions from:
- The full year annualized benefit from the approximately $32 million of sustainable cost savings instituted in Q2 2020 (savings expected for 2020 to be approximately $23 million);
- Continued benefit of the commercial, organizational and cost strategies implemented within our Industrial Services business; and
- Full year of operations at our Montney water disposal facility that has been fully operational servicing producers since the end of Q1 2020.
Credit Facility
Tervita has received commitments from its lending syndicate to increase the existing facility from $275 million to a minimum of $325 million and extend the term to December 2022. At September 30, 2020 the credit facility was undrawn. Closing of the amended and restated credit facility is subject to the execution of the refinancing of our senior secured notes due in December 2021 and the satisfaction of customary closing conditions.
"I am pleased with the progress these commitments make toward our refinancing plan, which is structured to position us well to pursue the execution of our strategic plan. I am grateful for the continued support of our banking partners that reflects our reliable and consistent performance. Building on this positive momentum, we continue to advance our discussions to refinance our senior secured notes as we continue to grow long-term value for our stakeholders," said John Cooper, President and CEO.
About Tervita
Tervita is one of the largest waste and environmentally-focused service providers in Canada, providing a broad and integrated array of services and environmental management solutions for customers in the energy, industrial, and natural resource sectors, predominantly in Western Canada.
For over 40 years, Tervita has been focused on delivering safe and efficient solutions through all phases of a project while minimizing impact, maximizing returns™. Our dedicated and experienced employees are trusted sustainability partners to our clients. Safety is our top priority: it influences our actions and shapes our culture. Tervita trades on the TSX as TEV. For more information, visit www.tervita.com.
Source: https://tervita.com/news/article/tervita-corporation-provides-positive-preliminary-third-quarter-/
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