Earnings call transcript: Secure Waste Infrastructure Q2 2025 sees solid growth

Secure Waste Infrastructure Corporation (SWIC) reported strong financial results for the second quarter of 2025, showcasing a 14% year-over-year increase in adjusted EBITDA per share and a 5% rise in revenue, excluding oil purchase/resale. Despite macroeconomic challenges, the company maintained its 2025 guidance, reflecting resilience in its operations. The stock, currently trading near its 52-week high of $2.53, has demonstrated strong momentum with a 28.3% return over the past six months. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value assessment.

Key Takeaways

• Q2 2025 adjusted EBITDA rose to $110 million, marking a 14% increase per share.
• Revenue grew by 5% year-over-year to $353 million.
• Net income climbed 17% to $31 million.
• The company maintained its 2025 guidance despite economic uncertainties.

Company Performance

Secure Waste Infrastructure Corporation demonstrated robust performance in Q2 2025, driven by strategic expansions and operational efficiencies. The company’s adjusted EBITDA increased significantly, reflecting effective cost management and operational scalability. This performance is in line with industry trends, where resilience in Canadian oil and gas production has supported growth.

Financial Highlights

• Revenue: $353 million, up 5% from Q2 2024
• Adjusted EBITDA: $110 million ($0.49 per share), a 14% increase
• Net Income: $31 million ($0.14 per share), a 17% rise
• Discretionary Free Cash Flow: $54 million, up 20% per share

Outlook & Guidance

Secure Waste Infrastructure maintains its 2025 adjusted EBITDA guidance between $510 million and $540 million. The company anticipates discretionary free cash flow of $270 million to $300 million, with growth capital set at $125 million and sustaining capital at $85 million. Management expects stronger performance in Q4 2025 and foresees volume growth in 2026, with produced water volumes projected to increase by 3-4%. The company’s commitment to shareholder returns is evidenced by its 13-year track record of consistent dividend payments, as highlighted in InvestingPro’s comprehensive analysis, which includes 12 additional key insights available to subscribers.

Executive Commentary

CEO Alan Granch stated, "We are closely monitoring evolving market conditions, but remain on track to deliver our 2025 plan." He emphasized the company’s resilience, noting, "Our infrastructure network is built for resilience," and highlighted sustainability as integral to operations, saying, "Sustainability is more than a strategy for us. It is embedded in how we operate."

Risks and Challenges

• Trade Policy: Uncertainty in trade policies, particularly US steel tariffs, could impact the metals recycling segment.
• Macroeconomic Pressures: Broader economic challenges may affect demand and pricing.
• Seasonal Impacts: Factors such as spring breakup and forest fires could disrupt operations.
• Competitive Landscape: The company faces competition in the metals recycling sector, necessitating strategic adjustments.
• Regulatory Changes: Potential changes in environmental regulations could affect operational costs.

Secure Waste Infrastructure’s Q2 2025 performance highlights its strategic focus and operational resilience, positioning the company well for future growth amidst ongoing economic challenges. For a deeper understanding of SWIC’s market position and growth potential, investors can access the detailed Pro Research Report, available exclusively on InvestingPro, which provides comprehensive analysis of the company’s financials, market position, and growth prospects among 1,400+ top stocks.

Full transcript - Secure Energy Services Inc. (SES) Q2 2025:

Conference Operator: Good morning, ladies and gentlemen,

Conference Moderator: and welcome to the Secure Waste Infrastructure Corporation Second Quarter twenty twenty five Results Conference Call. At this time, all lines are in listen only mode. Following the presentation,

Conference Operator: we will conduct a question and answer session.

Conference Moderator: This call is being recorded on Tuesday, 07/29/2025. I would now like to turn the conference over to Ms. Allison Prokop. Please go ahead.

Allison Prokop, Investor Relations, Secure Waste Infrastructure Corporation: Thank you, and good morning to everyone who is listening to the call. Welcome to Secure’s conference call for the 2025. Joining me on the call today is Alan Granch, our President and Chief Executive Officer Chad Magus, our Chief Financial Officer and Corey Haim, our Chief Operating Officer. We will be making forward looking statements during this call. These statements reflect current expectations and are subject to a number of risks and uncertainties.

Actual results could differ materially. We will also refer to certain non GAAP financial measures, which may not be directly comparable to similar measures disclosed by other companies. Please refer to our continuous disclosure documents on CDER plus for more information on risk factors and definitions. Today, we will review our financial and operational results for the three and six months ended 06/30/2025. I will now turn the call over to Alan.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Thank you, Allison. Good morning, and thank you for joining today’s call. Secure delivered solid second quarter results that reflect the resilience of our infrastructure backed model and our continued focus on maximizing value through capital allocation. Adjusted EBITDA was $110,000,000 or $0.49 per share, reflecting a 14% year over year increase on a per share basis from 2024, even as total adjusted EBITDA declined modestly due to a more typical spring breakup, active forest fires, and near term volatility in the metals recycling segment from US steel tariffs. We remain focused on creating shareholder value through disciplined capital deployment.

So far this year, we’ve returned $286,000,000 to shareholders through dividends and share repurchases, including completing $137,000,000 substantial issuer bid, and repurchasing an additional $104,000,000 under our normal course issuer bid. In total, we purchased 7% of our common shares outstanding year to date. On the growth front, we deployed $43,000,000 of our $125,000,000 capital budget in the first half of the year, advancing several projects that will drive reoccurring long cycle returns. The phase three expansion at our Clearwater Heavy Oil Terminal was completed in the first quarter and is fully operational. Construction continues on two new pipe connected produced water disposal facilities in the Alberta Montney, both under ten year contracts with strong counterparties.

The first facility is expected to be operational in the fourth quarter of this year, with the second facility expected to be in service early twenty twenty six. Upgrades are underway to our reopening of our waste facility in Alberta’s industrial heartland. We’ve also added to our railcar fleet, which we are increasing to approximately 200 cars to improve metal recycling logistics. Collectively, these investments strengthen our competitive position and are expected to support meaningful EBITDA growth in 2026. In our metal recycling business, which represents about 10% of our operations, we continue to manage through challenging conditions related to US tariffs, soft global demand, and trade policy uncertainty.

We have implemented targeted strategies including redirection of scrap volumes to The US where tariffs do not currently apply, dynamic feedstock pricing, selective purchasing, and a shift toward non ferrous volumes in order to protect segment performance and position the business for recovery. These efforts are ongoing and we anticipate any impacts in the short term will likely be recovered in future months. Based on the above, we remain cautious but are maintaining our 2025 guidance in the face of ongoing macroeconomic volatility, supported by higher volumes and pricing, contributions from organic growth projects, and

Conference Moderator: long term

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: industrial fundamentals. For the full year 2025, we expect adjusted EBITDA of $510,000,000 to $540,000,000 While the third quarter is typically our seasonal high point, we expect a modest shift in 2025 to the fourth quarter representing the strongest period of the year. This reflects the anticipated timing of recovery in the metals market, as well as the phased in service dates of the growth projects later in the year. We expect discretionary free cash flow of $270,000,000 to $300,000,000 growth capital of $125,000,000 sustaining capital of 85,000,000 and asset retirement obligation spend of $15,000,000 The long term fundamentals of our business remain intact. Consistent energy demand, mandated liability reduction and steady industrial activity.

Our infrastructure supports reoccurring waste streams and is built to perform across cycles. We provide critical regulatory driven services through this infrastructure helping our customers meet environmental obligations while ensuring safe compliant waste handling. Our balance sheet remains strong with total debt to EBITDA covenant ratio of two point times or 1.8 times excluding leases. We extended our revolving credit facility in the second quarter to 2028 and increased its size to $900,000,000 giving us ample liquidity to support our strategy. Last week, we released our 2024 sustainability report, and I want to take a moment to highlight some of our most impactful progress.

We exceeded our three year GHG emission reduction target, achieving an 18% reduction since 2021. We returned seven and twenty one thousand cubic meters of water to the watershed, reducing free water use by 6% over 2023. We spent a record $13,400,000

Speaker 4: with

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: indigenous suppliers, marking Secure’s continued commitment to supporting our indigenous partnerships. We also completed our first five year sustainability strategy and are now moving toward more actionable short term climate goals aligned with emerging frameworks and technologies. Sustainability is more than a strategy for us. It is embedded in how we operate, manage risk and create long term value as we transform waste into value. To close these opening remarks, we are closely monitoring evolving market conditions, but remain on track to deliver our 2025 plan and exit the year with solid momentum heading into 2026.

Our infrastructure network is built for resilience, our growth projects are backed by commercial agreements, and our capital allocation strategy is delivering significant value. With that, I’ll turn the call over to Chad to review the financials in more detail.

Chad Magus, Chief Financial Officer, Secure Waste Infrastructure Corporation: Thanks Alan, and good morning everyone. From a financial standpoint, the second quarter demonstrates our ongoing focus on per share growth and capital efficiency. Revenue, excluding oil purchase and resale, was £353,000,000 up 5% from Q2 twenty twenty four, supported by steady volumes across our core waste network, pricing increases and contributions from the Edmonton Metals acquisition. Net income was £31,000,000 or $0.14 per share, up 17% year over year on a per share basis, as our capital return strategy continues to drive significant growth in per share metrics. As Alan noted, adjusted EBITDA was down 4% on an absolute basis from the 2024, largely reflecting seasonality, the impact of forest fires, and a challenging market for metals recycling.

In addition, the prior year results benefited from a storage opportunity in energy infrastructure relating to the opening of the Trans Mountain Pipeline system. We saw continued strong cash flow conversion from adjusted EBITDA this quarter, with discretionary free cash flow of $54,000,000 up slightly from last year on an absolute basis, but an impressive 20% increase per share year over year. This level of free cash flow allows us to support our dividend, fund growth, and continue repurchasing shares. We maintained our regular quarterly dividend of $0.10 per share, and ended the quarter with liquidity of over $300,000,000 Looking ahead, we believe our strong balance sheet and robust projected cash flows provide us with the flexibility to execute on our capital allocation priorities, including advancing high return organic projects, maintaining our quarterly dividend of $0.10 per share, equal to approximately $88,000,000 annualized, based on current shares outstanding. Opportunistic share repurchase through the NCIB, which provides a flexible way to return capital to shareholders.

Management and the Board of Directors continue to view share buybacks as an attractive use of capital at current valuation levels. And lastly, maintaining our strong balance sheet. I’ll now pass on to Corey for some operational detail.

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Thanks, Jeff. Our operations teams performed well throughout the quarter despite seasonal disruptions from spring breakup and active forest fires near several operating regions. As forest fires become more frequent across Western Canada, our operational teams continue to refine and implement robust emergency response protocols and site level contingency planning. These efforts have enabled us to protect our people, maintain service continuity for our customers and minimize the operational impact of these events. At our waste processing facilities, we processed on average 92,000 barrels per day of produced water and 40,000 barrels per day of slurry and emulsion.

We also recovered 277,000 barrels of oil from waste streams, reinforcing the value we create. Five and sixty eight thousand tonnes of solid waste were safely contained across our landfill network. Overall, volumes were broadly stable year over year. Second quarter’s throughput was impacted by a combination of seasonal factors, including spring breakup conditions, active forest fires near several operating regions and gas plant turnaround activity. In particular, the scheduled maintenance and shutdown of a third party gas plant temporarily impacted our produced water volumes in the Montney Wapiti area.

This facility is connected to our customers’ production and the turnaround led to a short term reduction in upstream volumes, which are expected to be restored in early Q3. We view this investment positively as it enhances long term reliability and throughput capacity for the region. These headwinds were partially offset by additional processing capacity brought online at our Clearwater terminal. Our metals recycling business saw significant contributions from the Edmonton acquisition. While there are challenges in the ferrous market, we’re repositioning our operations to optimize costs and enhance flexibility.

We expect these strategies will help mitigate the macro factors impacting the business and set us up well for recovery. In Specialty Chemicals, we’re seeing strong customer demand and continued market share gains, despite the typical seasonal lag in Q2 compared to a strong Q1 and prior year Q2, which benefited from unusually favourable weather conditions. In Energy Infrastructure, volumes averaged 135,000 barrels a day, an increase of 12 from Q2 twenty twenty four, driven by increased throughput from the expansions of the Clearwater Terminal. Our capital program to spend $125,000,000 on growth projects and $85,000,000 on sustaining projects is on track. Major projects are advancing on schedule and we’re seeing strong customer interest in additional capacity, will inform capital plans for future years.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Thanks Corey. To wrap up, we’re pleased with our progress so far in 2025. We’ve delivered stable results despite seasonal and macroeconomic challenges, advanced our high return contract backed capital program, and returned $286,000,000 to shareholders through dividends and buybacks, driving meaningful per share growth. Operationally, our teams continue to perform well, executing projects that strengthen our infrastructure network and lay the groundwork for higher EBITDA in 2026. In our metals recycling business, we’ve responded quickly to volatility with targeted strategies that will help protect margins and better position us for recovery.

Our balance sheet remains strong, giving us flexibility to invest in growth, return capital and navigate ongoing market uncertainty. At the same time, we continue to lead in ESG, focusing on operational safety, minimizing environmental impact, enhancing community value and delivering long term returns. Looking beyond 2025, we remain confident in the long term fundamentals that underpin our business. Canadian oil and gas production continues to show resilience and steady growth with more than 80 strategically located high barrier facilities across Western Canada and North Dakota, Secure is well positioned to meet growing demand for our waste and energy infrastructure. Our network provides both expansion capacity and stability across market cycles, supporting consistent volume growth through 2026 and beyond.

Thanks again for joining us today. We’d now like to open the line for questions.

Conference Operator: Ladies and gentlemen, we will now begin the question and answer Your first question comes from the

Conference Moderator: line of Michael Doumet from National Bank. Please go ahead.

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Hey, good morning guys.

Speaker 7: I guess I’m going to start by saying, I think most people are thinking today, I’m a little surprised given the cautious tone in Q1 and the incremental headwinds from the tariffs and the forest fires that you guys maintained the 2025 EBITDA guide. So I guess with that, like nicely done obviously. But given some of the incremental pressures, can you expand on maybe some of the areas that you saw some upside? And then more generally, is there an area, be it the low, mid or high end of the guide that you feel most comfortable with today?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Good morning, Michael. Thanks for the question. Yeah, I think as we look through Q2 operating results, I think the headwinds we faced were obviously the forest fires that impacted some of our customers production when they had to shut in some of their facilities, so obviously you’re processing less waste. We also had the tariffs on Canadian steel, and a lot of these mills, difficult to operate when you have an additional 25% tariff. And so those were the headwinds we faced, you know, offset by, you know, we were pleased with the volumes that we saw in Q2, it’s probably more of a typical Q2 that we experienced, but pleased with the volumes.

We’re starting to see that happen here as we entered into Q3 where we’re anticipating the volumes are going to be strong. We do believe that we have this uncertainty around where we’re going to get to on this tariff and trade agreement with The US. I mean, we can’t anticipate what’s going to happen on August 1, which is why we put the cautionary note. I mean, we’re still six months away from full year guidance. And so to make a decision as to how this is going to play out, how it’s going to impact our metals business is difficult to make that judgment call.

So we have some positives. We’ve also got some positives from some of the organic growth that we’re currently spending right now. So we’ve got a couple of those projects that are advancing nicely that will come on in the fourth quarter. We think that if there is opportunity to move some of that scrap metal into The US. If that happens quicker, faster, that’ll happen in Q3.

If not, it’ll get pushed to Q4. So there’s lots of moving parts here, which is why we maintain guidance until we have more clarity on where all of this is going to play out. But I would say, yeah, you got positives and negatives, and we’re trying to do the best here to balance out where we think everything is going to land. I think one of our advantages on the metal side of the business, and I think, you know, we did an investor tour back in June and we had this discussion is our advantage right now on metals is we have 200 rail cars and we have the ability to ship into The US and further into The US. A lot of our competitors move scrap metal by truck, So we can move it by train, opening up more markets for us.

And so some of these markets, we haven’t used them in quite some time, but the fact that they’re there, they can do test loads and we can move multiple scrap loads down there, I think gives us huge competitive advantage. We just don’t know how long that takes to transition. So I know it’s a long winded answer, but I’m trying to give you a bit of our thought process as we think about where our guidance is and some of the cautionary pieces we put in the outlook.

Speaker 7: Yes. I definitely appreciate the details. Thanks, Alan. I guess further to that, there’s a line in the outlook that I think is new. You discussed how you expect volume growth and robust EBITDA contributions from your organic capital program well into 2026 and well beyond.

I mean, are you expecting outsized EBITDA from your capital program in 2026? And is there improved visibility into 2026 already in terms of volumes?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Yeah, I think, when you’re doing these large capital programs and specifically in the Montney, we’re seeing a lot of water from that area. A lot of our customers are trucking water you know, two hours away from a specific location and it’s why we’re tying in directly into their infrastructure. The geology is just very tight. And so you’re seeing that, you know, this huge amount of water coming through and we’re already talking about what they need in 2026 in terms of opportunities to continue to kind of tie into their network to avoid some of these larger trucking costs. And so that’s giving us clarity that we see the volume growth out of this area being substantial.

You know, we’re also seeing the growth out of Northeast BC, I mean we had LNG Canada just started to commission and start up, and so there’s going to be a lot of activity happening in Northeast BC to support some of the gas that’s going to now flow into Kitimat and be operational where we’re managing the waste as well for LNG Canada. And so you know we’re seeing these markers and we’re seeing what’s happening in some of our facilities where the produced water volumes remain quite strong, and so I think that gives us not only that organic element, but it also gives us that same store sales or that volume growth expectation as we head into 2026.

Speaker 7: Great. I’ll leave it there and get back in queue. Thanks.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Thanks, Michael.

Conference Operator: Your next question is from the

Conference Moderator: line of Arthur Nagorney from RBC Capital Markets. Please go ahead.

Speaker 4: Hey, good morning. Think you mentioned in your prepared remarks that you expect a recovery in the metals recycling business towards the back end of the year. Can you maybe just parse that out a little bit more and maybe even quantify your expectations for H2 relative to the first half of the year?

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Hey Arthur, I think that you know when you talk about the first half, think we sort of addressed the question in terms of the challenges we’ve had in the ferrous market. Typically in steel production most of the turndowns in steel productions happen during the summer for summer turnarounds and they sort of clean up the mills so to speak. So once we get through August here and we see the mills, specifically The US mills start to ramp up a bit, we’ll see more demand for scrap. You know as Alan mentioned, with the rail cars that we do have, we’re seeing you know at least more than a handful

Conference Moderator: of new mills take some

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: of our products, with intention to take even more through the back half of the year. So you know, we’ll see we’ll get back to sort of the regular run rate towards the end of the year and into the 2026. So there’s some green shoots sprouting here in the metals business and you know for the middle part of the year we’ve just had to pivot and adjust our strategy.

Speaker 4: Okay and then maybe sticking on the metals recycling business, the Canadian government has recently taken steps to protect the domestic industry. I know it’s still early, but can you maybe comment on what kind of market reaction you’ve seen to date?

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: I think you hit the nail on the head.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: I think it is still a

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: little bit too early. We’ll see the impact, we’ve yet to see the impact on the Canadian steel market, so I think we just have to leave it at that because it’s still pretty early days in terms of that announcement.

Speaker 4: Got it.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: And then maybe

Speaker 4: just touching on the forest fire situation a little bit more. Can you maybe quantify the impact in Q2 and is this situation in a better spot as of today or is it kind of similar to what we saw in Q2?

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: No, we’re in a much better spot than we were in Q2, and just to put in perspective, none of our facilities were shut in as a result of the fires, they were just the activity levels within into those facilities was impacted because our customers volumes were cut back because they were managing their own production. Know, so to put it in perspective, it’s you know maybe a five to 10% volume impact, you know on a week or two basis based on wherever the forest fires were burning. So pretty minimal impact at the end of the day.

Speaker 4: Got it, that’s helpful. And the last one before I jump in the queue. I know it’s a smaller part of your business, but can you give us some color on how the North Dakota business is trending relative to maybe your Canadian business?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Yeah, I think you know

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: when prices drop, WTI prices dropped you know, at the beginning of Q2, there was an immediate slowdown in those facilities. I think as we progressed through the quarter, it rebounded back to sort of forecasted volumes at this point. So, you know, short term impact at the beginning of Q2, but we’re seeing regular volumes into Q3.

Speaker 8: Thank you.

Conference Operator: Your next question is from

Conference Moderator: the line of Steve Hansen from Raymond James. Please go ahead.

Speaker 8: Yes. Good morning, Thanks for the time. Just wanted to ask about the inventory levels that you’re strategically holding here in the short term. How should we think about the unwind of that inventory? Is it just gonna be dependent upon market conditions?

Do you think it’s a 3Q event or more 4Q and or even into early next year? How do think about it?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Morning, Steve. Yeah, no, good question. I don’t know, I’m not saying it’s a strategy so much. Mean, our plan with the metal recycling facilities that we’ve acquired and hub and spoke model is really about to drive efficiencies through that shredder, but really to turn our inventory on a monthly basis. So if we have the Canadian mills running today at the capacity that we know they have, we would be turning that inventory.

Our goal isn’t to store any inventory, it’s really to turn it and maintain that margin and maintain that consistency. It’s really, it’s been since the tariffs have come on and we’ve lost the Canadian market and now are shifting into The US market is really just a function of timing. So we’ve lowered the price that we’re willing to accept scrap. And so, as we see scrap coming in, as we process it, we have to send this scrap into The US market. The US market would like to take a test load of it before they’re gonna agree to multiple loads.

That takes a month. You gotta turn the cars back and then you start shipping more ratably. And so that process just takes a bit of time. So we will likely have to hold more inventory in Q3, which then subsequently adds to margin and adds to profitability into Q4 and into Q1, which is why we’re saying it could get pushed out a little bit now. That being said, if we get an agreement here on August 1, the Canadian mills start to ramp back up now, now we’ve got to get all of our inventory, we could start to move very, very quickly.

There’s just a variety of scenarios that could play out here. I mean, we are taking the more proactive strategy of moving into The US market, but if something changes in the Canadian market, that could change the outlook of Q3 and not push as much into Q4. So it’s still undetermined depending on how this all plays out. But you’re right, we will have a bit more inventory here as we think about Q3.

Speaker 8: Okay, very helpful. Thank you. And just, I know, you’re not getting too specific on all this, but, you know, you’ve disclosed that the metals business is roughly 10% of the run rate. You know, is is there is there an ability to handicap on what you think the hit might have been in just the quarter on the metals business? Again, knowing the scenarios are still uncertain going forward, but just to sort of give us a quarterly impact of the metals being down.

Do we have a rough sense of dollar value?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: I think, you know, I would say, know, the impact was, you know, we’re we’re calling it, you know a small amount like a couple mil maybe like it’s not material and most of the impact was in June following that increase of 25% because the Canadian mills were canceling orders so some of that, some of those orders were in transit. And so there was a few million impact there, know, and some of it would then get shifted into Q3. So, you know, again, we talked a little bit about the differences between twenty four Q2 results and ’25. Part of it was, we had some storage profits on Trans Mountain last year, so that obviously boosted 2024 profits, offset by some of the things I was talking about within our volumes. So there was a few moving parts here in 2024 compared to 2025.

So pretty happy with the results in Q2 and our team being able to navigate some of these challenges that just kind of hit them. These are macro challenges that you face. It’s not operational challenges.

Speaker 8: No, understood. Appreciate the color. That’s great. Thanks, guys.

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Yeah. Thanks, Steve.

Conference Operator: Your next question is from

Conference Moderator: the line of Konark Gupta from Scotiabank. Please go ahead.

Speaker 7: Thanks and good morning, gents.

Speaker 9: Just maybe to square off first on your EBITDA guidance to Michael’s question perhaps in different way. Like if you are looking at, call it a 6% decline in the first half on EBITDA, you probably need about 14% or so in the second half growth to hit the bottom end of the range. So, I mean, you talked about the seasonality shifting from Q3 to Q4 this year, but sounds like Q3 might still be better quarter than last year’s Q3 and Q4 will be much stronger. Is that a fair way to characterize how things are shaping up at this point?

Chad Magus, Chief Financial Officer, Secure Waste Infrastructure Corporation: Yeah, good morning, Mark. Yeah, mean typically when we go back in time, breakup in Q2, see a lot of activity in Q3, and that’s usually our high watermark for the year. Just given the the metals acquisition in Q1 this year, and just what we’ve already talked about with that expectation, expect Q4 to be the busiest quarter of the year there. And then just with where our organic capital projects, where we’re spending the money and just when they’re going to come online. One of them is going to start to contribute, we hope early in Q4, which again just drives that number a bit higher.

So you’re right, we do expect a significant increase in our results in the latter half of the year, but I think that’s in line with our initial expectations.

Speaker 9: Thanks for the clarification. You talked about, I think in your prepared remarks as well as on the questions, in terms of how these projects that are coming online, the metal recycling business, resetting or normalizing over time perhaps and the capacity expansion you’re being you know, doing so far. Those all things come together in 2026. So, like, in base case scenario, when when when you don’t have more growth CapEx to spend for new projects in ’26, Are you expecting, you know, like what we are looking in in the second half of this year and obviously subject to seasonality and all that, should we analyze the second half to get some sense in 2026?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Yeah. Hey, Conor. Yeah. So I think, you know, when we think about our organic opportunities, you know, if I look at last year, we were around 75,000,000, this year we’re 125,000,000. I think our expectations are with some of the projects we have in the hopper, we could likely, complete projects in that 80 to 100,000,000 in 2026.

And even we’re starting to work on 2027 opportunities as well. So there’s always going to be this element of organic growth that is going to apply in these periods where you’ll have to account for. You know I’ve talked a little bit about volume growth, mean typically on the produced water we’re in that three to 4%, our emulsions in that two to percent, which is very consistent when we think about the year average as to where these volumes tend to be at. And then on top of that, we have an element where we will include pricing as well. I mean we continue to manage inflation and pass those costs through to our customers.

And so you’ve got an element of volume growth, you’ve an element of the pricing that we’re gonna be able to push out, and then you’re gonna have the organic projects that come in if you think about 2026. I also talked a little bit in the past about it’s gonna take us a little bit of time to get the full realization of the metals acquisition strategy. I mean, you don’t buy these businesses and day one, all the synergies come together. We’ve got a reroute where we’re processing some of the metals. We also want to upgrade their IT systems.

We know that we have to work through the previous owners inventory and process all that because we didn’t want to pay for it. We want to make sure they’re getting the price that’s the spot market price. So those things take time to realize to fruition. When I think about the Metals acquisition in February, it’s gonna take us twelve to eighteen months to get full run rate of where we think that facility and our overall network could get to. So you kind of have to look at 2026 with all those factors in mind in terms of how you get to where that forward EBITDA looks like.

But we can go offline and give you a little bit more color on that, but that’s kind of the high level assessment.

Speaker 9: Yeah, I think that’s very helpful in terms of thinking about the drivers that shape up the ’26. So you talked about the volumes, I think in Q2, I think on the waste management side of things, if I aggregate your water, the waste landfill, etcetera, the volumes are down in aggregate about 1% or so. But I think there was a forest fire impact in there as well, right? So I mean, what was your what do you think was your underlying volume growth in Q2? You know, it’s about the post fire effects?

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Konark, it’s Corey. Thanks for the question. I think when we look at normalized volume growth, it’s around that 3% level. You’re correct in terms of being a bit flat or down on volumes in the quarter. But again, when you have the wildfire activity and you have wetter weather, it defers a lot of work around the waste processing side, it defers a lot of the remediation reclamation projects on the landfill side, so we’ll get that volume into Q3 and Q4.

But the largest component of it being flat in the quarter was really that turnaround that happened at the gas plant the South Of Grand Prairie, which if you back that out and you normalize our water volumes without that turnaround, we’d be, you know, three percent quarter over quarter growth on the produced water side. So I think we just had a bit of operational complexities and macro factors in the quarter that led to sort of that flat

Chad Magus, Chief Financial Officer, Secure Waste Infrastructure Corporation: volume growth in the quarters.

Speaker 9: Okay, that’s helpful. And last one for me before I turn over. Just on the tariff side of things, I know you talked about a couple of things there. One, the steel mills are obviously having an impact from tariffs and we don’t know what’s coming out of that. But at the same time, obviously the scrap ferrous is not subject to tariffs.

Is there is there an opportunity to like besides obviously The US market you talked about, is there an opportunity to look into the ferrous exports of ferrous demand from some other end markets as the Canadian steel mills remain sort of in limbo for some time?

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Yeah, so currently Konark on the non ferrous side, most of the exports that we do are overseas, some through The US market. With respect to exporting ferrous steel overseas, it becomes cost prohibitive to move that volume. So at this point, you know, we’re focusing on North American mills and specifically American mills just ten seconds until we see a recovery in the Canadian market for ferrous steel.

Speaker 9: Okay, that’s great. Thanks so much for the time.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Thank you.

Conference Operator: Your next question is from the line

Conference Moderator: of John Gibson from BMO Capital Markets. Please go ahead.

Conference Moderator0: Good morning and thanks for taking my questions. Just first, I was wondering if you could touch on pricing in your core waste management or waste processing business. Obviously, you spoke positively to it in the release, we’ve seen some good comps from your peers. So wondering what it was like this quarter, and do you see some room for growth here in the back half of year?

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Good morning. So typically on the pricing side of things, we would do an annual pricing review and start to roll that out at the beginning of Q4 for all of our customers, and we would stick to that cycle. Again, we’ll start to review pricing here over the next few months and start engaging conversations with our customers, and that’s just sort of the cadence that we operate at, so you can expect the same.

Conference Moderator0: Okay, great. Second one for me. Just wondering about the impacts of lower WTI prices on your business. And does your 2025 guide imply a bit of an uptick in commodity prices or maybe a widening of differentials? Or is it sort of expectations of flattish prices here going forward?

Chad Magus, Chief Financial Officer, Secure Waste Infrastructure Corporation: Yeah, good morning, John. What we use is just flattish for now. We don’t have any kind of, I’d say, expectations that are firm one way or another, but just relatively flat.

Conference Moderator0: Okay, great. Thanks for taking my questions. I’ll turn it back.

Conference Operator: Your next question is from

Conference Moderator: the line of Michael Doumet from National Bank. Please go ahead.

Speaker 7: Yes, thanks for taking the follow-up.

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Look, you guys have done a

Speaker 7: lot of buybacks since 2023 with on the sale of the assets to these connections. And I would say that not every company looks smart on a look back on large scale buybacks. Kudos to you guys. I guess the question here is, like how do we think about testing the upper limits in terms of share price for buybacks and maybe keeping something a little bit more balanced in terms of keeping some dry powder for either opportunistic purchases or M and A going forward?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Yeah, good follow-up question. I’d say on the buybacks, when we think about the SIB we executed, we really fast forwarded a big portion of our NCIB by doing that at what we thought was the price had just gone too low given the quality of our assets. And we continue to monitor that each quarter as to where it is. And you look at our balance sheet, we’re still under levered to where our target debt to EBITDA is. So we do have that flexibility to continue to buy back the stock where we believe the intrinsic value in the multiple is higher than where it’s trading at today.

So, you know, we still have a remaining amount on our NCIB, which we’ll continue to pursue that through this year. But you’re right, I do see potentially some M and A here where when we continue our metals strategy in terms of operational efficiencies and consolidating some of these mom and pops, I think they’re going to be put in a position where where you’re not being able to sell to some of these Canadian mills and your only mode of transportation is trucking. I think there might be an opportunity where we should start to have some other conversations. So the dry powder you speak of, I think would be opportunistic for us to keep some of that dry powder and as some of these potential opportunities play out in the next six months here. So it’ll be a balance of yes, we want to make sure we’re getting the intrinsic value and buying back our stock when we think it’s below the value it should be trading at.

But at the same time, yeah, some of these opportunities could come to fruition, we want to make sure we can execute. And I think Chad did a good job here in the second quarter by increasing our credit facility, giving us a bit more capacity there. Then you’ve to remember too this business kicks out 50% free cash flow conversion. So we’re kicking off a lot of free cash flow. It’s not necessarily we’re relying on debt, we’re using free cash flow.

So we got lots of levers to pull here which puts us in a great spot.

Speaker 7: That’s great. And maybe just to hit on all of the points there, Alan, do you think that the total addressable market for metal recycling M and A is above the previous number that you previously communicated. And I wonder if you think the multiples that you can get them at are a little bit more distressed given the situation as well.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Yeah, I think it potentially could be. I mean, I’ve talked about we have potentially another 100,000,000 more of M and A to you, that number could go a little bit higher. I do think the opportunity for us to get more value there in terms of what multiples we would have to pay given the current economic environment. I think this is truly where scale and operational capacity really plays into our favor. And so I think you’re right.

I think it could go that direction and we just got to see how it all plays out here.

Speaker 4: Great, thank you.

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Thank you.

Conference Operator: Your next question is from the line

Conference Moderator: of Ian Gillies from Stifel. Please go ahead.

Conference Moderator1: Good morning, everyone.

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: As it pertains to M and A,

Conference Moderator1: is it plausible if a trade deal isn’t announced August 1 and it stretches out a little longer than we thought, is it plausible to get M and A done in this sort of environment? Or is it pens down until there’s, I guess, some rules of engagement?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Morning Ian. Yeah, no, good question. I think it’s almost depending on where they’re located, depending on their financial situation, depending on the family dynamics. They all have their own uniquenesses and variety of scenarios that could play out, but you know this has been, we’ve been bumping along the bottom here for a period of time, and so I think that puts a lot of due stress on a lot of these families where I think they’re getting to points where they have to make decisions. So I think from our perspective, we’re there to work with them, but you can only take it so far.

We’re not dealing with investment banks and big corporations, we’re dealing with small mom and pops. That’s just the way the Western Canadian business has operated for a number of years. I anticipate some will get done, but again, it’s just hard to predict their dynamics. And I don’t know how August 1 is gonna play out in terms of pushing them one step further, but good question.

Conference Moderator1: Along the capital allocation lines as well, with the share price doing a bit better and valuation expanding, has there been any discussion yet around perhaps switching the strategy to a bit more dividend growth as you move into ’twenty six and ’twenty seven? Or is it still a buyback focus in the here and now?

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Yeah, good morning, Ian.

Chad Magus, Chief Financial Officer, Secure Waste Infrastructure Corporation: I think in the here and now, we’re still focused on the ultimate valuation of the company and think buybacks are our best option. Think along with our board, we continue to have that discussion and that could change, and hopefully it does change one day when we feel like we’re valued more appropriately, but in short term focus on buybacks.

Conference Moderator1: Understood. Last one for me. If we think about where we are now versus when you originally released guidance in December, is there any new cost optimization initiatives that have been put in place since that time that perhaps give you a bit more confidence and a bit more control over getting into the range than might have had at the time of announcement?

Chad Magus, Chief Financial Officer, Secure Waste Infrastructure Corporation: Yeah, I think on the G and A side, it’s not as impactful as the operations, but we have and we continually almost every year look at all of our costs and where we can become more efficient. We’ve had a lot of organizational changes over the last few years since since merging with Trevia and divesting some assets. So I think we’ve done recently completed some initiatives there. With respect to operations, I think we’re always doing that as well, but there’s been nothing fundamental

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: since putting out guidance. The largest operational improvement that we would be doing on a regular basis is just around debottlenecking and how can we get more throughput through the same asset that we have, so it’s a continual exercise that we do with the operating teams.

Conference Moderator1: Understood, thanks very much. That’s helpful. I’ll turn it back over.

Conference Operator: Your next question is from the line of

Conference Moderator: Arthur Nagorney from RBC Capital Markets. Please go ahead.

Speaker 4: Hey, thanks for taking my follow-up. I know a lot can change before the August 1 deadline, but as it relates to the prospective implementation of U. S. Tariffs on copper, can you maybe provide some preliminary thoughts on how this might impact your metals recycling business? And maybe give us some perspective on the kinds of conversations you’re having with customers today?

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: Yeah, I mean I think at the end of the day for all of the scrap that we’re dealing with and the commodities, it’s really a control we can control at this point. So the conversations with the customers are really around, hey we have supply, they pay a fair price for our supply, we don’t have any insight today that things are going to

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: change from the status quo. So

Corey Haim, Chief Operating Officer, Secure Waste Infrastructure Corporation: you know, I have a hard time giving you a straight answer here Arthur, because I don’t know anything different than what we’re being told today by our suppliers plus our customers.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Yeah, we do ship a lot of our non ferrous material internationally, so that opens up a lot more markets for us, so it’s not so much just what The US does or if there’s an impact to the overall price of copper, that can get factored in from an international market perspective. So that market actually could be a positive for us on some of these moves because we do deal with a lot of copper.

Speaker 4: That’s helpful. And then last one for me, recovered oil was a bit of a drag on revenues in the waste management segment. Can you give us some perspective on what that looked like in the quarter? And can you remind us what the EBITDA margins look like in that business line?

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Yeah, like I think when we look at recovered oil, we’re recovering waste, we’re processing waste and recovering oil all the time. I think when you look at 2024, oil was 80 US WTI, this second quarter was 63. So the impact is minimal in terms of, you know, overall contribution to our bottom line. You know, when you look at the margins, we were adjusted EBITDA margin of 31%, we, you know, we go through our history, Q2 is always, a bit of a softer margin. I think this year we’re still projecting 33% margins for the 2025 year, so kind of right on track to where we target.

So, as Chad mentioned, we’ve kind of just kept price flat as we think about the forecast. We’re not here to predict where WTI goes. We’re here to ensure where the volumes need to be processed and what we think our expectations are through Q3 and Q4. I guess I would leave you with, we’re thinking our margins will be on track at 33% for 2025.

Chad Magus, Chief Financial Officer, Secure Waste Infrastructure Corporation: Thank you.

Conference Operator: There are no further questions

Conference Moderator: at this time. I’d like to turn the call over to Alan Grange for closing comments. Sir, please go ahead.

Alan Granch, President and Chief Executive Officer, Secure Waste Infrastructure Corporation: Well, you for your time today and the robustness of all the questions. That was great. We thank you and your continued support of Secure, and we look forward to sharing our third quarter results in October.

Conference Operator: Ladies and gentlemen, this concludes today’s conference call.

Conference Moderator: Thank you very much for your participation. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.