Crispr Therapeutics shares tumble after significant earnings miss
Tidewater Midstream and Infrastructure Ltd (market cap: $49.92M) reported a challenging first quarter for 2025, with a consolidated net loss of $31.8 million, a significant increase from the $11.3 million loss in the same period last year. According to InvestingPro analysis, the company has been quickly burning through cash and operates with a significant debt burden, adding to investor concerns. The company missed earnings expectations with an EPS of -$0.07 compared to the forecasted -$0.0331. Revenue also fell short, coming in at $252.9 million against a forecast of $489.56 million. This performance resulted in a pre-market stock decline of 23.68%, with shares closing at $0.285, down from the previous close.
Key Takeaways
- Tidewater’s Q1 2025 EPS and revenue both missed forecasts significantly.
- The net loss widened to $31.8 million from $11.3 million year-over-year.
- Stock price dropped by 23.68% in pre-market trading.
- The company completed a $24 million asset sale to reduce debt.
- Market conditions expected to improve in Q2 2025.
Company Performance
Tidewater Midstream faced a difficult quarter due to lower refined product sales and wider product margins. The company reported a consolidated adjusted EBITDA of -$3.7 million, a sharp decline from $39.8 million in Q1 2024. Despite these challenges, Tidewater completed the sale of its BRC Roadway Network for $24 million, using $22.5 million to repay debt. The company is focusing on cost control and asset optimization to navigate the current market conditions.
Financial Highlights
- Revenue: $252.9 million, down from the forecasted $489.56 million.
- EPS: -$0.07, missing the forecast of -$0.0331.
- Consolidated net loss: $31.8 million, compared to $11.3 million in Q1 2024.
- Adjusted EBITDA: -$3.7 million versus $39.8 million in Q1 2024.
Earnings vs. Forecast
Tidewater’s actual EPS of -$0.07 fell short of the forecasted -$0.0331, marking a significant miss. This represents a negative surprise of approximately 111%. Revenue also missed expectations by a substantial margin, coming in at $252.9 million against an anticipated $489.56 million.
Market Reaction
Following the earnings announcement, Tidewater’s stock experienced a sharp decline of 23.68% in pre-market trading. The stock’s performance reflects investor concerns over the earnings miss and the broader market challenges the company faces. InvestingPro data shows the stock has fallen significantly over the last year, though it has shown strong returns over the last three months with a 37.4% gain in the past six months. The stock is now trading closer to its 52-week low of $0.105, indicating a bearish sentiment among investors.
Outlook & Guidance
Looking ahead, Tidewater is targeting $100 million in non-core asset sales and aims to improve throughput and margins in the coming quarters. InvestingPro subscribers have access to additional insights, including 8 more ProTips and a comprehensive Pro Research Report that provides deep-dive analysis of Tidewater’s financial health, which is currently rated as WEAK with a score of 0.31. The company expects market conditions to tighten and improve in Q2 2025, driven by changes in the BC Low Carbon Fuels Act and a reduction in diesel oversupply in Western Canada.
Executive Commentary
CEO Jeremy Baines stated, "Q1 was a difficult quarter as a result of wider discounts on refined products and producer shut-ins affecting our midstream operations." He emphasized the company’s focus on improving cash flow and operating results, adding, "Our number one focus is liquidity and reducing leverage."
Risks and Challenges
- Wider discounts on refined products impacting profitability.
- Oversupply of diesel in Western Canada affecting market conditions.
- Trade challenges with US renewable diesel imports.
- Ongoing search for a new CFO, potentially impacting leadership stability.
- Market volatility and macroeconomic pressures affecting the energy sector.
Q&A
During the earnings call, analysts inquired about the progress of non-core asset sales and the rationale behind the Western Pipeline acquisition. Management also addressed their marketing strategy for refined products and discussed challenges in feedstock processing.
Full transcript - Tidewater Midstream and Infrastructure Ltd (TWM) Q1 2025:
John, Conference Call Operator: Good afternoon, ladies and gentlemen, and welcome to the Tidewater Midstream and Infrastructure Limited Q1 twenty twenty five Financial 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 require immediate assistance, please press 0 for the operator. This call is being recorded on Thursday, 05/08/2025.
Now I would like to turn the call over to your first speaker today, Michael Cratcher. Please go ahead, sir.
Michael Gracher, Manager, Investor Relations, Tidewater Midstream: Thank you, John, and welcome, everyone, to Tidewater Midstream’s first quarter twenty twenty five results conference call. I’m Michael Gracher, Manager, Investor Relations, and joining me today are Jeremy Baines, CEO and Aaron Ames, Tidewater Midstream’s Interim CFO. Also with us and available during the question and answer session is Sean Gignini, EVP, Private Strategy and Ian Quarterly, VP, Finance. Before we begin, please note that matters discussed on the call include forward looking statements under applicable securities laws with respect to Tidewater Midstream and Infrastructure, including but not limited to statements regarding investments and acquisitions by the company, commercial arrangements of the company, the business strategies and operational activities of the company, the markets and industries in which the company operates, costs and expense management, the company’s leverage and plans for debt and leverage reduction refinancing of the company’s indebtedness and the value of the company’s assets and the future growth objectives, targets and financial and operating performance of the company and its businesses. Such statements are based on factors and assumptions that management believes are reasonable at the time that they were made and information currently available.
Forward looking statements we may express or imply today are subject to risks and uncertainties, which can cause actual results to differ from expectations. Further, some of the information provided refers to non GAAP measures. To learn more about these forward looking statements and non GAAP measures, please see Tidewater Midstream’s financial reports, which are available at www.tidewatermidstream.com and on SEDAR plus And
John, Conference Call Operator: with that, I will now pass
Michael Gracher, Manager, Investor Relations, Tidewater Midstream: the call over to Jeremy to go over the quarter.
Jeremy Baines, CEO, Tidewater Midstream: Thanks, Michael, and thanks to everyone for joining us today. Q1 was a difficult quarter as a result of wider discounts on refined products and producer shut ins affecting our midstream operations. We remain very focused on improving our cash flow and operating results. To this end, a few days ago, we announced an agreement to purchase the north segment of Pembina’s Western Pipeline. Western Pipeline is a three seventy seven kilometer crude oil pipeline originating in Taylor, British Columbia, and terminating at our Prince George Refinery.
The Western Pipeline is the key transportation conduit tying the Prince George Refinery into the Northeastern British Columbia crude supply region. As part of the transaction, Tidewater and Pembina will enter into an interconnection agreement upon closing, which will allow Tidewater to continue to access existing crude sources at the terminal located in Taylor, British Columbia for the next twenty five years. This is expected to provide PGR with a reliable and lower cost source of feedstock compared to historical operations. At PGR, throughput averaged 9,936 barrels per day, which was 9% lower than Q4 twenty twenty four, and 20% lower than the first quarter of twenty twenty four. The decrease for both periods was largely due to third party facility and pipeline maintenance that decreased the volume of crude feedstock coming into the facility, as well as inventory management.
Throughput is expected to return to normal levels over the course of the year. HTRD had an average throughput of approximately 2,239 barrels per day compared to 2,116 barrels per day during the same period in the prior year, and 2,677
Michael Gracher, Manager, Investor Relations, Tidewater Midstream: barrels per
Jeremy Baines, CEO, Tidewater Midstream: day during the fourth quarter of twenty twenty four. While utilization was relatively consistent with the first quarter of twenty twenty four, the decrease from the fourth quarter of twenty twenty four reflects excess supply of refined products in Western Canadian market, somewhat muted demand, and inclement weather affecting rail logistics. As previously noted, during the fourth quarter, the five year offtake agreement with Synovus, which provided the sale of the majority of refined product volumes for PGR expired, and the company has now transitioned to marketing all refined products produced at both the HDRD and PGR facilities in house. Whilst Tidewater has made significant progress in marketing its diesel and gasoline volumes, current market discounts are significantly wider than those at the time the Synovus offtake agreement was entered into, largely stemming from the oversupply of diesel in Western Canada. We have taken steps to improve our cost structure, including the recently announced acquisition of the Western Pipeline, and we are focused on improving our utilization.
We also expect that the BC government’s changes to the Low Carbon Fuels Act will continue to provide over time improved refined product margins for our Tidewater Renewables HDRD facility. On 05/05/2025, the Canadian International Trade Tribunal issued a decision to terminate its preliminary injury inquiry in respect of Tidewater Renewables countervailing, anti subsidy, and anti dumping duty complaint relating to imports of renewable diesel from The United States. While we are disappointed with the tribunal’s decision, Tidewater Renewables remains committed to free and fair trade in Canada’s renewable diesel market. Our view remains that the facts support a finding that unfair trade practices by The United States caused the flood of subsidized and dumped renewable diesel into Canada. This flood of imports has significantly injured Tidewater, currently the sole Western Canadian producer of renewable diesel.
Tidewater Renewables is carefully reviewing its options in respect of the tribunal’s decision with the support of its external trade law council. Upon receipt of the tribunal’s reasons expected on May 23, the corporation will assess all available options and legal remedies, including but not limited to promptly filing an amended or new complaint to CBSA. In spite of this hopefully temporary setback to our trade case, we have seen significant improvement as a result of Canadian renewable blend requirements as part of the new BCLCFS regulations, along with California LCFS and D4 RIN prices, increasing the import parity price of US renewable diesel available into the British Columbia market. This has seen a significant increase in our margins at our facility, and we expect this to hold for the rest of the year. On the midstream side of the business, the Brazeau River complex operated exceedingly well.
The BRC gas processing facility had throughput of 94,000,000 cubic feet a day in the first quarter of twenty twenty five, ’30 ’8 million cubic feet a day lower than the fourth quarter of twenty twenty four, and 40,000,000 cubic feet per day lower than the first quarter of twenty twenty four. The lower throughput was primarily due to lower straddle volumes coming through the facility as a function of an outage at Plant 3 of the facility and the discontinuation of our sour gas processing after the second quarter of twenty twenty four. We are seeing increasingly positive demand for processing capacity in the area and hope to be able to make some announcements later in the area later in the year on that front. As we discussed at year end, gas processing activities at the Ram River gas plant have been temporarily curtailed with sulfur handling activities continuing to be operational. We continue to focus on controlling costs at the facility with the intent to restart the facility as AECO pricing improves and produce restart operations.
We also continue to remain focused on our liquidity, and we’ve made great progress on non core asset sales and deleveraging. On 03/25/2025, we announced that the company completed the previously announced sale of the BRC Roadway Network for total proceeds of $24,000,000 of which $22,500,000 was received and used to repay outstanding debt. We also continue to advance our non core asset sales programs and will update the market as progress is made. Before I turn the call over to Aaron to go through our financial results, I wanted to let you know that effective 05/18/2025, Aaron will be stepping down as Interim CFO due to personal circumstances. On behalf of myself, the Board of Directors, and Tidewater, we would like to give a great big thank you to Aaron for his dedication and hard work helping the corporation progress its strategy during his tenure.
The Board of Directors will be conducting a comprehensive search to identify and evaluate internal and external candidates for the role of Chief Financial Officer. With Aaron’s departure in court lead, currently Tidewater Renewables Chief Financial Officer and Tidewater’s Vice President of Finance will be appointed Interim Chief Financial Officer effective 05/18/2025. Aaron will remain with the corporation and serve as Special Advisor to the CEO to ensure a smooth transition of responsibilities until 06/13/2025. Ian will also continue to serve as Tidewater Renewables Chief Financial Officer, an office he has held since May of twenty twenty four. I will now turn the call over to Aaron to go through our financial results.
Aaron Ames, Interim CFO, Tidewater Midstream: Thank you, Jeremy. Consolidated net loss attributable to shareholders was $31,800,000 during the first quarter of twenty twenty five, compared to a net loss attributable to shareholders of $11,300,000 during the first quarter of twenty twenty four. The increase in net loss attributable to shareholders was due to lower refined product sales and lower product margins, offset in part by lower depreciation, interest expense, favorable changes in the fair value of derivative contracts and higher income from equity investments. Consolidated adjusted EBITDA was negative $3,700,000 during the first quarter of twenty twenty five, compared to $39,800,000 during the first quarter of twenty twenty four. The decrease in EBITDA is primarily driven by lower refined product sales and lower product margins in the first quarter twenty twenty five, offset in part by favorable changes in the fair value of derivative contracts and higher income from equity investments.
I’ll now ask John, our operator,
Jeremy Baines, CEO, Tidewater Midstream: to open the call up for questions.
John, Conference Call Operator: Yes, sir. Thank you. Ladies and gentlemen, we will now begin the question and answer session. We now have our first question, and this comes from Patrick Kenny of National Bank Financial. Your line is now open.
Please go ahead.
Patrick Kenny, Analyst, National Bank Financial: Yes. Good morning. Jeremy, wondering if you could provide an update on your noncore asset sale program for the year. I believe you were looking at around $100,000,000 or so of opportunities. Just curious if these processes are still live given the macro uncertainties facing potential buyers out there right now.
And overall, how would you say that the pace of executing the program is tracking relative to your initial expectations coming into the year?
Jeremy Baines, CEO, Tidewater Midstream: Yeah, I mean obviously we are very successful with the VRC Roads. The process continues, we are making progress. We can’t comment on any of the ongoing potential transactions until they’re announced and we’ll do that at the appropriate time, but you know we’re still on track that 100,000,000 inclusive of the DRC roads.
Patrick Kenny, Analyst, National Bank Financial: Okay and then I guess outside of non core asset sales just given you know the uncertainty around the direction of commodity prices through the summer in the back half of the year. Curious if you can comment on what other sources of liquidity you might be looking at, what other levers might be available to help bridge the gap if needed just until better market conditions resume from a operating cash flow perspective?
Jeremy Baines, CEO, Tidewater Midstream: Yeah I mean obviously there’s asset sales and you know like I said we’ll announce some of those as we go. We also have built up a significant inventory of BCLCFS credits at what is now a relatively attractive price to the current market we’re seeing, so we have some leverage there. Obviously we continue to sell inventory that we built up during the first quarter at the PGR facility and we’re actually you know we’re moving significant barrels, our sales have increased significantly every month since the start of the year, so we continue to generate liquidity that way. So you know and always you know being a prudent operator, managing cash flows, looking at every single source of revenue and costs and continuing to manage that way.
Patrick Kenny, Analyst, National Bank Financial: Got it, and then last one for me just on the acquisition of the Northern segment of the Western pipeline. I appreciate the OpEx savings guidance there, but just wondering what the ownership of the system might do to the to your run rate maintenance capital program. I believe, coming ahead cited the need to invest over, you know, 300,000,000 or so on in line inspections and other maintenance projects over the next ten years. So I’m just wondering if this aligns with your assessment and whether or not a $30 plus million per year increase to your run rate maintenance capital program is a reasonable assumption.
Jeremy Baines, CEO, Tidewater Midstream: Yeah, so let’s talk about the pipeline and glad you raised that. Obviously we see Pembina as a good operator. The pipeline is younger than TMX, younger than line one, I think line two, line three, and it’s about average age for liquids pipelines in North America. Pembina has been a good operator, it’s done good maintenance on it, but over the last more than eight years, Tidewater and predecessors have funded the complete integrity and maintenance program that Pembina has undertook on the pipeline, OpEx and maintenance, plus a capital fee of $10,000,000 a year over the last three years. So that 10,000,000 is clearly going to go away.
The second point is you know this pipeline wasn’t core to Pembina and we think we’re better aligned with the pipeline and how it will be run. We expect to continue to see run rate capital over the ten years similar to what we’ve been spending. Like in capital I’m talking OpEx integrity spending and CapEx. And we’ve got a detailed ten year plan. We’re not the owners of the pipeline yet, so we haven’t released it, but we do expect we’ll be able to continue to do it at a cost effective level and hopefully you know given our alignment, maybe be able to do it a little lower cost than Pembina.
Obviously they’ve been getting effectively a risk free significant return on the pipeline because they weren’t responsible. They didn’t bear any of the costs, we paid them all and we’ll continue to do that, make sure we run safely and with proper integrity as we go forward.
Patrick Kenny, Analyst, National Bank Financial: Okay, so sorry, just to clarify the OpEx savings there, the 10,000,000 to $15,000,000 that’s inclusive of the maintenance capital program that you expect to spend?
Michael Gracher, Manager, Investor Relations, Tidewater Midstream: Yes. Okay. Got it. I’ll jump back in the queue. Thank you.
John, Conference Call Operator: Thank you. And the next question comes from Rob Hope from Scotiabank. Your line is now open. Please go ahead.
Rob Hope, Analyst, Scotiabank: Hi, everyone. I was hoping you could add a little bit of color on the quarter over quarter deconsolidated EBITDA walk moving from, we’ll call it 14 to minus six. Like if we think about the key drivers there, lower volumes on the gas side, lower volumes on the refined product side, weaker margins, are you able to give us maybe a little bit more clarity on how much each of those factors impacted results as well as the go forward outlook there?
Aaron Ames, Interim CFO, Tidewater Midstream: Yeah, so we didn’t, it’s not in the, we didn’t disclose that, but as you said it as a result of lower volumes and lower margin. We do expect on a go forward basis that the volumes and margins will improve. The first quarter was just a relatively more difficult operating environment and going forward though beginning in Q2 we expect that to start to see some improvement there.
Rob Hope, Analyst, Scotiabank: All right that is helpful there and then can you maybe just talk about what you’re seeing in terms of spreads for the refined product business there as you’re marketing it yourself? Is that improving and was that weaker than expecting in Q1 there as well?
Jeremy Baines, CEO, Tidewater Midstream: Q1 had fairly low crack spread. Hasn’t improved towards the end of Q1 and continues to sit about 85. Aaron mentioned the differentials have been a little bit wider. We think the market is slowly starting to tighten up on that front. We’ve but you know we took over the marketing in November of last year.
We’ve been broadening our customer base. We went from one significant customer to with a handful of customers to now you know servicing 30 plus customers and we continue to grow that roster of customers and optimize the margins and we’re making good headway on that front.
Rob Hope, Analyst, Scotiabank: Thank you. I’ll hop back in the queue.
John, Conference Call Operator: Thank you. The next question comes from Maurice Choi from RBC Capital Markets. Just
Maurice Choi, Analyst, RBC Capital Markets: want to come back to the Western pipeline system. Maybe just more broadly, are there any other similar investment or cost saving opportunities like this that you’ve been interested in doing? Or is this one where the deal came about in a rather unique way and it’s not replicable?
Jeremy Baines, CEO, Tidewater Midstream: I mean this deal, obviously this is a very strategic asset for us, and is important to our Prince George refinery. We’ve got some other things that we’re working on that are interesting, smaller type tuck ins. I mean this is unique in that it is a strategic asset to us for our refinery, non core to Pembina, and we’re always looking for opportunistic opportunities to deploy capital at a good return.
Maurice Choi, Analyst, RBC Capital Markets: And do you see these tuck ins needing to be married from a timing and funding perspective with the non core asset sales program?
Jeremy Baines, CEO, Tidewater Midstream: Yeah, I mean our number one focus is liquidity and reducing leverage, and you know it’s a pretty high bar return hurdle that for us to do things like this, so we’ll continue to monitor that and make sure we make the right moves on that front.
Maurice Choi, Analyst, RBC Capital Markets: Understood, and if we could just finish off with some more broad market commentary here. Given the lower commodity price environment, how would you characterize your demand for utilities? Any thoughts about the throughput in the coming quarters?
Jeremy Baines, CEO, Tidewater Midstream: Yeah, we see ourselves increasing throughput as we go forward. This was a tough quarter on that front. We do you know see significant opportunities around the Brazil facility to add volumes and you know contract extensions and so forth at that facility, so we are seeing some positives there. Hopefully with LNG Canada we see some of the drier gas become a little more profitable for producers and we see some activity on that front as well.
Maurice Choi, Analyst, RBC Capital Markets: Understood and thanks to Aaron for your dedication and hard work and look forward to working with you a little bit more. Thank you.
John, Conference Call Operator: Thank you. Thank you. And the next question comes from Robert Cutelier from CIBC Capital Markets. Your line is now open. Please go ahead.
Robert Cutelier, Analyst, CIBC Capital Markets: Hey, everyone. I wondered if you could just provide a little bit more of an update on the offtakes at PGR. Is this a situation where you expect to eventually sign medium or longer term agreements, or do you expect to be a little bit more month to month on your sales portfolio going forward?
Aaron Ames, Interim CFO, Tidewater Midstream: Yeah, I mean it’s a
Jeremy Baines, CEO, Tidewater Midstream: good question Rob. Obviously under the right terms we would sign term agreements if they’re available in the market. It’s not, I would say the offtake agreement that was signed with Synovus when the facility was, or with Husky when the facility was purchased, is atypical the refining. We typically do sort of one to three year deals with you know we try to get minimum liftings in them, but that’s just the nature of the refined products market, and you know we, so it’s been a you know you can imagine it’s been a big transition from invoicing one customer to 30 plus customers over time and we’re moving there and we’re starting to see some more strength in demand as we’re reducing our inventory.
Robert Cutelier, Analyst, CIBC Capital Markets: Okay, understood. And then just on the feedstock costs, I think there was a comment in the quarter about you had to process some higher density feedstock costs. Could you explain what happened there and the outlook for feedstock going forward in Q2 and beyond?
Jeremy Baines, CEO, Tidewater Midstream: Yeah, like it was just one of those circumstances where producers upstream activities we had some producer or a producer that we had some offline as they’re increasing their production and we had another producer who put some further processing that took some of the light ends off, and it just you know it’s all a big pool that comes together in the tank before it comes to us, and so some of the historically it’s been getting lighter and it got a little bit heavier based on what happened there, based on like we buy from multiple producers and it all gets together, so we think it’s behind us and there’s actually going to be some more feedstock becoming available here shortly with some new programs that have just been completed, so I think it’s temporary to the quarter. It did happen before Tidewater owned the facility, was a bit of a increase in shortly short term increase in density for a while with things like this, and so it takes a little bit of time for us to readjust the refinery and so forth and be able to process it properly, so it does change the yields a little bit as well.
So we think it’s behind us, but you know we’re working on it for sure. Okay, thank you.
John, Conference Call Operator: Thank you. And there are no further questions that came through at this time. I’ll now hand the call over back to Michael Krasure for closing remarks. Please go ahead, sir.
Michael Gracher, Manager, Investor Relations, Tidewater Midstream: Thanks, everyone, for joining the call. The team is available to address any outstanding items with the contact information at the bottom of this morning’s press release. Thank you.
John, Conference Call Operator: Thank you. This concludes our conference call for today. Thank you all for participating. You may now disconnect.
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