Inter Pipeline Announces Second Quarter 2020 Financial and Operating Results

Inter Pipeline’s payout ratio* for a entertain was 27.9 percent.

Oil Sands Transportation

Inter Pipeline’s oil sands transport business constructed clever handling and financial formula in a second entertain of 2020. Funds from operations during a generation were $151.8 million compared to $149.7 million for a same generation in 2019. Inter Pipeline generates money upsurge from this business from a accumulation of high-quality, long-term cost of use contracts that are not generally impacted by via volume or commodity cost fluctuations.

Average throughput volume for a whole complement increasing by over 6 percent from 1,158,100 b/d to 1,232,900 b/d in a second entertain compared to a same generation in 2019.

NGL Processing

NGL estimate generated supports from operations of $37.1 million for a second entertain of 2020, compared to $72.1 million for a second entertain of 2019.  Results continued to be unfavourably impacted by revoke frac widespread pricing on Cochrane propane-plus and Offgas olefinic NGL production, that was partially equivalent by aloft sales volume and aloft Offgas paraffinic frac-spread pricing. In a nearby term, FFO from this business would sojourn underneath vigour should revoke commodity prices persist.

The Cochrane and Empress hover plants processed 3.1 billion cubic feet of healthy gas per day during a second entertain of 2020, unchanging with volumes processed during a same generation a year ago. Approximately 120,200 b/d of ethane and propane-plus was extracted during a quarter, an boost of 18,900 b/d compared to a second entertain of 2019. Average sales volume from a Redwater Olefinic Fractionator (ROF) increasing by 6 percent, from 32,600 b/d in a second entertain of 2019, to 34,700 b/d during a second entertain of 2020.

Heartland Petrochemical Complex

In a second entertain of 2020, Inter Pipeline continued to allege construction during a $4 billion Heartland Petrochemical Complex. Construction during HPC stays really active with approximately 2,600 workers now on site any day, fast by serious sanitation and amicable enmity controls. Second entertain 2020 investment into a devise was $238 million, bringing a sum devise spend given pregnancy to approximately $2.7 billion.

Several construction milestones were met during a propane dehydrogenation trickery over this generation including a designation of a electrical systems, a interior components of a splitter building and a condensers. Activities during a polypropylene plant embody a execution of a reactor structure and a designation of a cycle gas compressor and a light stack. Significant swell was also done on advancing a rail loading yard, a vicious supply sequence member for a transport of polypropylene to market.

The process to secure a partner to squeeze a element seductiveness in a Heartland Petrochemical Complex stays active. While there can be no certainty that a decisive agreement will be reached, a partner would advantage from fasten a well-developed, world-scale petrochemical devise that has estimable blurb advantages.

Conventional Oil Pipelines

Inter Pipeline’s compulsory oil pipelines business shred generated supports from operations of $26.3 million as throughput volume and selling activities on this complement declined in response to a fall in tellurian appetite prices. 

As expected, normal throughput volume decreased to approximately 140,000 b/d, down approximately 45,000 b/d from a second entertain of 2019, due to writer prolongation curtailments. At this time, early formula for a third entertain of 2020 infer that volume is commencement to recover. July’s normal volume was approximately 157,000 b/d. 

In April, a 75-kilometer Viking Connector pipeline, that provides new entrance to a Edmonton marketplace heart and additional coherence for producers, was placed into use on time and on budget. In addition, a construction of two,130,000-barrel storage tanks during a Stettler Terminal, was finished during a finish of June. These activities interpretation a initial two-phases of Inter Pipeline’s designed multi-phased enlargement of a Central Alberta tube system. Additional phases are approaching to be grown when marketplace conditions improve.

Bulk Liquid Storage

Inter Pipeline’s bulk glass storage business generated clever financial formula in a second entertain of 2020. Funds from operations increasing to $34.2 million in a second entertain of 2020, from $26.9 million a year ago, with a Danish terminals stability to knowledge clever polished petroleum storage demand. 

Storage function rates increasing to 98 percent in a second entertain of 2020, compared to 83 percent during a same generation in 2019. Demand for storage infrastructure is approaching to sojourn clever in Europe via 2020.

Financing Activity

Inter Pipeline is committed to progressing financial coherence and increasing liquidity during a stream serious marketplace environment. In a second entertain of 2020, Inter Pipeline sealed a new $1.0 billion unsecured revolving credit trickery with a associate of pivotal lenders and extended a majority date of a drawn $500 million tenure loan trickery by dual years to August 2022. In Jun of 2020, Inter Pipeline successfully released $700 million of 7-year comparison unsecured medium-term records to revoke indebtedness underneath a $1.5 billion revolving credit trickery and to repay $500 million of medium-term records that grown in July 2020.

As during June 30, 2020, Inter Pipeline had $2.5 billion of permitted committed ability on a existent revolving credit comforts and is positioned to account any near-term designed collateral expenditures, including remaining costs for a Heartland Petrochemical Complex. At entertain end, Inter Pipeline had a combined net debt to sum capitalization ratio* of 42.5 percent, significantly subsequent a limit compact turn of 65 percent.

Inter Pipeline maintains investment class credit ratings. Standard Poor’s and DBRS Limited have reserved Inter Pipeline a credit rating of BBB- (negative) and BBB (stable), respectively.

Board of Director Change

Inter Pipeline also announces that Mr. Richard Shaw and Mr. Brant Sangster will be timid from Inter Pipeline’s Board of Directors effective during a May 2021 annual ubiquitous meeting. Mr. Shaw has served on a house given 2009 and in a purpose of Chair given 2014. Mr. Sangster also assimilated a house in 2009 and served on a EHS Committee and chaired a Major Projects Review Committee.

Inter Pipeline intends to designate Ms. Margaret McKenzie, a member of Inter Pipeline’s Board of Directors given 2015, as Chair of a house following a subsequent annual assembly of shareholders. Ms. McKenzie has some-more than 30 years knowledge in a appetite zone particularly in a areas of finance, devise expansion and corporate governance.

“Ms. McKenzie has a decade prolonged lane record in business care and vital planning,” commented Richard Shaw, Chair of a Board. “She has a border of attention knowledge and bargain of this classification to be rarely successful in heading Inter Pipeline’s Board of Directors.”

Conference Call and Webcast

Inter Pipeline will reason a second entertain 2020 financial and handling formula discussion call and webcast on August 7, 2020 during 9:00 a.m. MT (11:00 a.m. ET) for meddlesome shareholders, analysts and media representatives.

To attend in a discussion call, greatfully dial 1 (888) 231-8191. A replay of a discussion call will be permitted until August 14, 2020 by job 1 (855) 859-2056. The formula for a replay is 7889542. A couple to a webcast is permitted on Inter Pipeline’s website.

Select Financial and Operating Highlights

(millions, solely volume, per share and percent amounts)

Three Months Ended Jun 30

Six Months Ended Jun 30

Operating Results

2020

2019

2020

2019

Pipeline volume (000s b/d)

Oil sands transportation

1,232.9

1,158.1

1,289.4

1,178.7

Conventional oil pipelines

139.7

184.9

160.8

186.0

Total tube volume

1,372.6

1,343.0

1,450.2

1,364.7

NGL estimate volume (000s b/d)(1)

Natural gas estimate – Ethane

71.6

59.5

71.0

65.8

Natural gas estimate – Propane-plus

48.6

41.8

47.4

45.6

Redwater Olefinic Fractionator sales volume

34.7

32.6

35.7

34.1

Total NGL estimate volume

154.9

133.9

154.1

145.5

Bulk glass storage ability utilization

98%

83%

97%

80%

Financial Results

Revenue

$539.5

$641.6

$1,143.3

$1,300.5

Funds from operations

Oil sands transportation

$151.8

$149.7

$306.3

$297.3

NGL processing

$37.1

$72.1

$80.3

$140.1

Conventional oil pipelines

$26.3

$49.6

$62.9

$83.7

Bulk glass storage

$34.2

$26.9

$69.0

$53.7

Corporate costs

$(65.0)

$(58.1)

$(126.6)

$(123.1)

Total supports from operations

$184.4

$240.2

$391.9

$451.7

Per share(2)

$0.43

$0.59

$0.92

$1.11

Net income

$62.5

$260.3

$151.6

$358.6

Per share – simple and diluted

$0.15

$0.63

$0.36

$0.88

Adjusted EBITDA(2)

$232.5

$285.1

$487.7

$538.2

Supplemental Financial Information

Cash dividends declared

$51.5

$175.7

$232.6

$349.6

Per share(3)

$0.120

$0.428

$0.548

$0.855

Payout ratio(2)

27.9%

73.1%

59.4%

77.4%

Capital expenditures

Growth(2)

$275.7

$363.7

$587.3

$680.4

Sustaining(2)

$7.6

$18.8

$12.5

$30.7

Total collateral expenditures

$283.3

$382.5

$599.8

$711.1

About Inter Pipeline Ltd.

Inter Pipeline is a vital petroleum transportation, healthy gas liquids processing, and bulk glass storage business formed in Calgary, Alberta, Canada. Inter Pipeline owns and operates appetite infrastructure resources in western Canada and Europe. Inter Pipeline is a member of a SP/TSX 60 Index and a common shares trade on a Toronto Stock Exchange underneath a pitch IPL. www.interpipeline.com

Contacts

Investor Relations:
Jeremy Roberge
Vice President, Finance and Investor Relations
Email:investorrelations@interpipeline.com
Tel:  403-290-6015 or 1-866-716-7473

Media Relations:
Breanne Oliver
Director, Corporate Communications
Email: mediarelations@interpipeline.com
Tel: 587-475-1118 or 1-866-716-7473

Reader Advisories and Cautionary Statements

Forward-Looking Statements
Certain information contained herein might consecrate forward-looking statements and information (collectively, “forward-looking statements”) within a definition of germane bonds legislation that engage famous and different risks, assumptions, uncertainties and other factors. Forward-looking statements mostly enclose terms such as “may”, “will”, “should”, “anticipate”, “expects” and identical expressions. Readers are cautioned not to place undue faith on forward-looking statements, including, though not singular to, statements regarding: our skeleton to transition many of a crew now operative from home behind to Inter Pipeline offices and a timing thereof; our fasten to a wellbeing of a workforce in sequence to safeguard a essential services crew can sojourn protected while they work a item bottom safely and reliably; a ability to generate cash upsurge from a oil sands transport business from a accumulation of high-quality, long-term cost of use contracts that are not generally impacted by via volume or commodity cost fluctuations; a expectancy that in a nearby term FFO from a NGL estimate business will sojourn underneath vigour should revoke commodity prices persist; a ongoing process to secure a partner to squeeze a element seductiveness in a Heartland Petrochemical Complex and a advantages from fasten a well-developed, world-scale petrochemical devise that has estimable blurb advantages; a expectancy that additional phases of a multi-phased enlargement of a Central Alberta tube complement will be grown when marketplace conditions improve; a expectancy that a direct for storage infrastructure will sojourn clever in Europe via 2020; a fasten to progressing financial coherence and increasing liquidity during a stream serious marketplace environment; a destiny impact on a business due to COVID-19; being positioned to account any near-term designed collateral expenditures, including remaining costs for a Heartland Petrochemical Complex; the timing for changes to Inter Pipeline’s house of directors and a appointment of a new Chair and a inlet of a transition routine in this regard; and a timing for holding a quarterly discussion call. Such statements simulate a stream views of Inter Pipeline with honour to destiny events and are theme to certain risks, uncertainties and assumptions that could means Inter Pipeline’s formula to differ materially from those voiced in a forward-looking statements. Factors that could means tangible formula to change from forward-looking statements or might impact a operations, performance, expansion and formula of Inter Pipeline’s businesses include, among other things, risks and assumptions compared with operations, such as Inter Pipeline’s ability to successfully exercise a vital initiatives and grasp a approaching advantages therefrom, including a serve expansion of a projects and facilities; assumptions concerning operational reliability; a intensity delays of and costs of overruns on construction projects and destiny expansions of Inter Pipeline’s assets; a fulfilment of a expected advantages of acquisitions and other projects Inter Pipeline is developing; a timing, financing and execution of acquisitions and other projects Inter Pipeline is developing; risks fundamental in Inter Pipeline’s Canadian and unfamiliar operations; risks compared with a disaster to finalize grave agreements with counterparties in resources where letters of vigilant or identical agreements have been executed and announced by Inter Pipeline; Inter Pipeline’s ability to beget sufficient money upsurge from operations to accommodate a stream and destiny obligations; Inter Pipeline’s ability to say a stream turn of money dividends to a shareholders; Inter Pipeline’s ability to entrance sources of debt and equity capital; Inter Pipeline’s ability to make collateral investments and a amounts of collateral investments; Inter Pipeline’s ability to say a credit ratings; a accessibility and cost of labour, apparatus and construction materials; a status, credit risk and continued existence of counterparties carrying contracts with Inter Pipeline and a affiliates and their opening of such contracts; rival factors, pricing pressures and supply and direct in a oil and gas transportation, healthy gas liquids estimate and storage industries; increases in maintenance, handling or financing costs; accessibility of adequate levels of insurance; problem in receiving compulsory regulatory approvals or land entrance rights and upkeep of support of such approvals and rights; risks of war, hostilities, polite insurrection, instability and domestic and mercantile conditions in or inspiring countries in that Inter Pipeline and a affiliates operate; serious continue conditions and risks compared to meridian change; militant threats; risks compared with technology; accessibility of appetite commodities; sensitivity of and assumptions per prices of appetite commodities; fluctuations in banking and seductiveness rates; changes in laws and regulations, including environmental, regulatory and taxation laws, and a interpretation of such changes to Inter Pipeline’s business; a risks compared with existent and intensity or threatened destiny lawsuits and regulatory actions opposite Inter Pipeline and a affiliates; ubiquitous mercantile and business conditions; a effects and impacts of a COVID-19 pestilence as serve described below, a border and generation of that are capricious during this time, on Inter Pipeline’s business and ubiquitous mercantile and business conditions and markets, and such other risks and uncertainties described from time to time in Inter Pipeline’s reports and filings with a Canadian bonds authorities.

In sold and though reduction of a foregoing, a conflict of COVID-19 has had a disastrous impact on tellurian financial conditions. Inter Pipeline can't accurately envision a impact COVID-19 will have on a ability to govern a business skeleton in response to supervision open health efforts to enclose COVID-19 and to obtain financing or third parties’ ability to accommodate their contractual obligations with Inter Pipeline, including due to uncertainties relating to a ultimate geographic widespread of a virus, a astringency of a disease, a generation of a outbreak, and a length of transport and quarantine restrictions imposed by governments of influenced jurisdictions; and destiny direct for Inter Pipeline’s services. In a eventuality that a superiority of COVID-19 continues to boost (or fears in honour of COVID-19 continue to increase), governments might boost regulations and restrictions per a upsurge of work or products, and transport bans, and Inter Pipeline’s operations, suppliers and customers, and ability to allege a projects or lift out a ongoing business plan, could be adversely affected. In particular, should any employees or consultants of Inter Pipeline turn putrescent with COVID-19 or identical pathogens, it could have a element disastrous impact on a Inter Pipeline’s operations, prospects, business, financial condition and formula of operations.

Further, though reduction of a foregoing, destiny division payments, if any, and a turn thereof is uncertain, as Inter Pipeline’s division process and a supports permitted for a remuneration of dividends from time to time is contingent upon, among other things, permitted supports from operations, financial mandate for Inter Pipeline’s operations and a execution of a expansion strategy, fluctuations in operative collateral and a timing and volume of collateral expenditures, debt use mandate and other factors  over Inter Pipeline’s control. The ability of Inter Pipeline to recompense dividends is theme to germane laws (including a compensation of a solvency exam contained in germane corporate legislation) and contractual restrictions contained in a instruments ruling a indebtedness, including a credit facilities.

Many of a risk factors and other assumptions compared to a forward-looking information are discussed serve in Inter Pipeline’s many new MDA and Annual Information Form, and other papers it files from time to time. You can find these papers by referring to Inter Pipeline’s form on SEDAR (www.sedar.com). As tangible formula could change significantly from a forward-looking information, we should not put undue faith on forward-looking information. Such information, nonetheless deliberate reasonable by Inter Pipeline during a time of preparation, might after infer to be improper and tangible formula might differ materially from those expected in a statements made. For this purpose, any statements that are not statements of chronological fact are deemed to be forward-looking statements. The forward-looking statements contained in this news recover are done as of a date of this document, and, solely to a border compulsory by germane law, Inter Pipeline assumes no requirement to refurbish or correct forward-looking statements done herein or otherwise, either as a outcome of new information, destiny events, or otherwise. The forward-looking statements contained in this request are specifically competent by this cautionary note.

Non-GAAP Financial Measures

EBITDA, combined net debt to sum capitalization, FFO per share and payout ratio are not measures famous by GAAP. These non-GAAP financial measures do not have standardised meanings prescribed by GAAP and therefore might not be allied to identical measures presented by other entities. Investors are cautioned that these non-GAAP financial measures should not be construed as an choice to other measures of financial opening distributed in bearing with GAAP such as net income. EBITDA is voiced as net income before financing charges, income taxes, debasement and amortization; adjusted EBITDA also includes additional adjustments for detriment (gain) on ordering of assets, non-cash responsibility (recovery), and non-cash financing charges. These additional adjustments are done to bar several non-cash items, or equipment of an surprising inlet that are not contemplative of ongoing operations. These adjustments are also done to improved simulate a chronological dimensions of EBITDA used in a investment village as an estimate magnitude of an entity’s handling money upsurge formed on information from a income statement. See a many new MDA for an instance of a settlement of EBITDA net income. Consolidated net debt to sum capitalization is disclosed and discussed in a Financial Covenant list of a “Liquidity and Capital Resources” territory of a many new MDA. This magnitude in multiple with other measures, is used by a investment village to consider a financial strength of a business. FFO is a financial magnitude that Inter Pipeline uses in handling a business and in assessing destiny money mandate that impact a integrity of destiny dividends to shareholders. Inter Pipeline expresses FFO as money supposing by handling activities reduction net changes in non-cash operative capital. The impact of net change in non-cash operative collateral is released in a calculation of FFO essentially to recompense for a seasonality of operative collateral via a year. Certain Inter Pipeline income contracts foreordain an sell of money that differs, on a monthly basis, from a approval of revenue. Within a 12-month calendar year, there is minimal movement between income famous and money exchanged. Inter Pipeline therefore excludes a net change in non-cash operative collateral in a calculation of FFO to lessen a quarterly impact. The vigilant is to not askance a formula of Inter Pipeline in any entertain for exchanges of cash, though to concentration a formula on money that is generated in any stating period. FFO per share is distributed on a weighted normal basement regulating simple common shares superb during a period. This measure, in multiple with other measures, is used by a investment village to consider a source, sustainability and money permitted for dividends. Payout ratio is distributed by expressing dividends announced for a generation as a commission of FFO. This measure, in multiple with other measures, is used by a investment village to consider a sustainability of a stream dividends.

Credit Ratings

Credit ratings are dictated to yield investors with an eccentric magnitude of credit peculiarity of an emanate of securities. Credit ratings are not recommendations to purchase, reason or sell bonds and do not residence a marketplace cost or bearing of a specific confidence for a sold investor.  There is no declaration that any rating will sojourn in outcome for any given generation of time or that any rating will not be revised or cold wholly by a rating group in a destiny if, in a judgment, resources so warrant.

Currency

All dollar values are voiced in Canadian dollars unless differently noted.

SOURCE Inter Pipeline Ltd.

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