Secure Waste Infrastructure Corp.

Good afternoon, ladies and gentlemen, and welcome to the Secure Energy Q1 2023 results conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Thursday, April 27, 2023. I would now like to turn the conference over to Alison Prokop. Please go ahead.

Thank you. Welcome to Secure's conference call for the first quarter of 2023. Joining me on the call today is Rani Amaro, our Chief Executive Officer, Alan Branch, our President, and Chad Magus, our Chief Financial Officer. During the call today, we will make forward-looking statements related to future performance, and we will refer to certain financial measures and ratios that do not have any standardized meaning prescribed by GAAP and may not be comparable to similar financial measures or ratios disclosed by other companies. The forward-looking statements reflect the current views of SECURE with respect to future events and are based on certain key expectations and assumptions considered reasonable by SECURE. Since forward-looking information address future events and conditions, by their very nature they involve inherent assumptions, risks, and uncertainties, and actual results could differ materially from those anticipated due to numerous factors and risks. Please refer to our continuous disclosure documents available on CDAR as they identify risk factors applicable to secure factors which may cause actual results to differ materially from any forward-looking statements and identify and define our non-GAAP measures. Today, we will review our financial and operational results for the first quarter of 2023, followed by our outlook for the remainder of the year. I will now turn the call over to Rennie for his opening remarks.

Thank you, Allison, and good afternoon, everyone. The momentum that supported our business throughout 2022 carried on through the first quarter of 2023, resulting in higher volumes at our waste processing facilities and increased demand for all business units due to strong industry fundamentals. As a result, we recorded adjusted EBITDA of $151 million, a 20% increase over the first quarter of last year. We continue to maintain our strong adjusted EBITDA margin of 36% as the positive impact from cost-saving synergies related to the Terbita merger and higher revenue leading to improved fixed cost absorption more than offset the impact of inflation. In the fourth quarter of 2022, we presented our updated capital allocation priorities, which reflect the increased breadth and size of the corporation. our commitment to maintaining a strong balance sheet, unlocking additional shareholder value through increasing returns to shareholders and growing our business through our capital investment program. In the first quarter of 2023, we were pleased to deliver on these priorities with the return of $100 million of capital to shareholders through our $0.10 quarterly dividend and share repurchases under our normal course issuer bid. Since the inception of the NCIB, we have repurchased 4.5% of our outstanding common shares. We announced today an increase to our capital growth plan for 2023 to approximately $100 million, up from previous guidance of $50 million as we entered into a new 12-year take-or-pay agreement with a senior NP producer for water disposal in the Montney region of Alberta. We are excited to work in partnership with our customer commission new infrastructure associated with this contract this year, providing secure with long-term take-or-pay volumes and providing our customers with cost-effective, reliable solutions for growing volumes. Alan will speak more on this development along with the construction progress of our crude oil gathering pipeline and terminaling infrastructure in the Clearwater region during the operational updates. In our first quarter financial reporting, we revised our segment reporting to reflect changes following the completion of the Terbita post-merger integration and providing stakeholders with improved visibility and transparency for valuing the business. Operating segments with similar operating characteristics and economic prospects have been aggregated to form three segments. The environmental waste management infrastructure segment, is comprised of waste processing recovery recycling and disposal operations offered through our network of waste processing facilities water pipelines industrial landfills waste transfer and metal recycling facilities the energy infrastructure segment is comprised of crude oil gathering optimization termling and storage solutions offered through our network of crude oil gathering pipelines terminals and storage facilities and The oil field services segment is comprised of drilling fluids, equipment rentals, and onsite project management. The new reporting structure provides a more direct connection between the corporation's operations, the services we provide to customers, the ongoing strategic direction of secure. Recast financial information for 2021 and 2022 by quarter has been included in the MD&A to reflect these new segments. We are very excited. to share our fourth annual comprehensive report on sustainability with you next week. Our ESG priorities in 2022 were focused on emission reduction, water conservation, and building an inclusive and welcoming culture. We are proud of the progress we've made in these three areas, highlighted by an 8% reduction in Scope 1 and 2 emission intensity, an 8% reduction in freshwater consumption, and the introduction of company-wide diversity, equity, and inclusion training. The Sustainability Report provides an update on these and other ESG achievements and sets out new goals and initiatives we are undertaking to further improve our ESG performance. I'd like to thank our remarkable employees who lead our ESG journey and have enabled the transformation of elements of our ESG strategy from plans to realities in our business. In March, we were pleased to appoint Wendy Hanrahan to the Board of Directors. Wendy is a former TC Energy Executive VP and brings to our board a deep knowledge of the North American energy infrastructure sector and expertise in strategy, information technology, finance, human resources, and other corporate services. Wendy will be a key addition to SECURE as it enters in its next phase of growth and development as a leader in environmental and related energy infrastructure. We were disappointed with the decision received from the competition Tribunal on March 3rd with respect to the Commissioner of Competition's challenge of SECURE's merger with Servita. While the Tribunal agreed with SECURE that not all of the 41 facilities the Commissioner was seeking to have SECURE dispose of should be sold, it issued an order requiring SECURE to divest 29 of the 103 facilities acquired in connection with the merger. We have filed a Notice of Appeal to the Federal Court of Appeal and believe we have strong grounds in doing so. The next step in the appeal process is the filing of our factum expected to occur next week, which will contain our detailed argument. The appeal hearing has been tentatively scheduled for the week of June 19th, and we believe the decision could be received by the fourth quarter of 2023. While the appeal of the competition tribunal decision is not anticipated for some time, the partial stay received with respect to divest your order allows us to operate status quo. If the tribunal decision is final after any and all appeals are exhausted, we will be prepared to conduct a process to maximize sale proceeds from required divestitures, which we can then use to strengthen the business through the repayment of debt, growth, and additional shareholder returns. Chad will now go through the financial highlights from the first quarter of 2023.