Tervita’s adjusted EBITDA grew in 2019, mainly due to its 2018 acquisition of Newalta performing above expectations.
The Canadian company also reported that its production strength and strategy to pursue increased margins in industrial services paid dividends in 2019.
Tervita—a waste management and environmental solutions provider in the mining, industrial, and oil and gas sectors—expects its strategy will maintain momentum this year, according to a company news release.
The company is optimistic about continued infrastructure opportunities, like the Montney water disposal facility currently under construction, which could produce positive results for its customers.
Tervita reported an adjusted EBITDA increase of 22pc from $191mn ($139mn) in 2018 to $233mn for calendar 2019, thanks in large part to inputs received from Newalta, attention to operational proficiencies, and better Canadian crude oil prices.
The company’s adjusted EBITDA margin in 2019 was 33pc, which increased from a margin of 30pc in 2018. The Q4 2019 adjusted EBITDA increased by 18pc compared to the same quarter in 2018 for similar reasons.
Tervita’s revenue increased by 18pc to $2.32bn in calendar 2019 compared to $1.97bn in 2018 following Newalta’s integration and the associated full-year benefits.
Tervita’s revenues, exclusive of energy marketing, improved by 12pc to $716mn in 2019 compared to $637mn in 2018 for the same reasons.
Revenue, exclusive of energy marketing, dropped by 10pc in Q4 2019 compared to the same period in 2018 due to less volume coming into the service system, declines in US drilling, and decreased ferrous metals volume and pricing.
Net debt reported by the company on Dec 31, 2019 was $738mn, which decreased from $759mn on the same date in 2018, because the US-Canadian dollar exchange rate improved, and the company spent within its cash flow.
Tervita reported a non-cash loss of $120mn for the year ending Dec 31, 2019, which correlated to write-downs of certain assets within energy services. Around 65pc was due to drilling-based operations in the United States and Canada, and the remainder was mostly due to paused or closed facilities that stopped meeting internal cash and return expectations. These resources were not a material factor in the 2019 adjusted EBITDA.
C$1.38 = US$1