Canadian petroleum transport and storage company Inter Pipeline has reported an adjusted EBITDA of C$278 million (€188 million) for Q1 2020, a 5% increase over the same period in 2020.
Funds from operations are 15% higher than Q1 2020, at C$239 million, while net income was C$128 million, a 43% increase compared to Q1 2020.
The first quarter of 2021 has been busy for Inter Pipeline. On 1 January, the company reorganised its business segments and financial reporting structure, to better reflect its operations. The four new segments are Transportation, Facilities Infrastructure, Marketing and New Ventures, replacing the previous segments, which were Oil Sands Transportation, Conventional Oil Pipelines, NGL Processing and Bulk Liquid Storage.
Inter Pipeline is also fending off a hostile takeover from Brookfield Infrastructure Partners, which formally launched its unsolicited offer to acquire all outstanding common shares of Inter Pipeline for C$16.50/share in February. Inter Pipeline urged its shareholders to reject the offer, saying it undervalued the company, and launched a strategic review process to maximise shareholder value. The special committee carrying out the review is chaired by Margaret McKenzie, who was announced in March as the new chair of Inter Pipeline board following the retirement of Richard Shaw. It is considering a possible corporate transaction and is seeking a partner for its Heartlands Petrochemical Complex (HPC).
HPC is a world-scale integrated polypropylene facility currently in the latter stages of construction in Strathcona, Alberta, Canada. It is expected to come onstream in early 2022 and Inter Pipeline has executed take-or-pay contracts with seven third parties representing 60% of production capacity, almost at its target of 70%, with negotiations continuing with other parties. The final estimated cost is US$4.2 billion, which has risen slightly due to costs associated with COVID-19 and worker safety.
The company has also entered into a new agreement with Nova Chemicals for the sale of ethane produced from the Cochrane extraction plant.
‘Inter Pipeline continues to successfully execute its business plan as evidenced by our solid quarterly results and the considerable progress made on contracting and completion of the Heartland Petrochemical Complex,’ says Christian Bayle, Inter Pipeline’s president and CEO. ‘The ongoing construction work at HPC is progressing well, and we remain on track to begin generating significant additional cashflow for shareholders in early 2022.’