Secure Energy Services ((TSE:SES)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for SECURE Waste Infrastructure Corp. painted a picture of resilience and strategic adaptability amidst challenging market conditions. The company demonstrated its ability to maintain strong cash flows and make significant strategic advancements, although these were tempered by ongoing challenges, particularly in the metal recycling segment and a downward revision of EBITDA guidance. The sentiment of the call was balanced, reflecting both positive achievements and market-driven obstacles.
Strong Infrastructure-Backed Business Performance
SECURE Waste Infrastructure Corp. reported a robust quarter, showcasing the strength of its infrastructure-backed business model. The company achieved an adjusted EBITDA of $135 million for Q3 2025, marking a 6% increase year-over-year. This performance underscores the resilience of SECURE’s operations, even in the face of lower oil prices.
Successful Transition of Metal Recycling Shipments
The company successfully redirected 95% of its metal recycling shipments to stronger U.S. markets, where scrap metal is exempt from tariffs. This strategic move highlights SECURE’s adaptability in navigating complex market conditions and optimizing its operations.
Progress in Long-Cycle Infrastructure Projects
SECURE made significant strides in advancing its long-cycle infrastructure projects, including two major pipeline-connected water disposal facilities in Alberta. These projects, supported by 10-year commercial agreements, are expected to be operational by early 2026, contributing to stable and recurring cash flows.
Shareholder Returns and Capital Management
The company demonstrated its commitment to shareholder returns by distributing $335 million through dividends and share buybacks, effectively reducing outstanding shares by approximately 8%. SECURE maintained a quarterly dividend of $0.10 per share, reflecting strong capital management.
Metal Recycling Business Challenges
Despite strategic successes, SECURE faced challenges in its metal recycling segment. The segment continued to experience weakness due to soft Canadian demand, driven by tariffs on finished steel sold into the U.S., leading to reduced domestic sales and inventory buildup.
Guidance Revision due to Market Conditions
SECURE revised its 2025 adjusted EBITDA guidance to approximately $500 million, a 2% reduction from the previous low end of the range. This revision reflects lower drilling and completion activities and ongoing challenges in the metal recycling business.
Revenue Decline
The company reported a revenue decline, excluding oil purchase and resale, to $365 million, down 2% from Q3 2024. This decrease was primarily due to lower specialty chemical sales and volumes tied to reduced drilling and completions.
Net Income Drop
SECURE’s net income fell to $1 million, a significant drop from $94 million in the same period last year. This decline was attributed to a noncash $55 million provision for crude oil storage capacity and the absence of a prior year tax recovery.
Forward-Looking Guidance
Looking ahead, SECURE Waste Infrastructure Corp. provided updated guidance, revising its adjusted EBITDA for 2025 to approximately $500 million, reflecting a 2% reduction from the previous guidance. This adjustment is due to reduced drilling and completion activities and challenges in the metal recycling business. Despite these hurdles, the company remains optimistic about its infrastructure investments and anticipates continued growth as long-cycle projects near completion.
In conclusion, the earnings call for SECURE Waste Infrastructure Corp. highlighted a balanced sentiment, with strong strategic advancements offset by market-driven challenges. The company’s ability to maintain robust cash flows and adapt strategically was evident, although the downward revision of guidance and challenges in the metal recycling segment were notable concerns. Investors will be keenly watching how SECURE navigates these challenges while continuing to capitalize on its infrastructure-backed business model.