Trans Mountain Corporation Releases First Quarter 2025 Financial Results

Globe and Mail

2 days ago

CALGARY, Alberta, May 30, 2025 (GLOBE NEWSWIRE) -- Trans Mountain Corporation ('TMC' or 'the Company') has released its financial statements and associated management report for the three months ending March 31, 2025. The Company's financial results are also included in Canada Development Investment Corporation's ('CDEV') consolidated quarterly financial statements.
Adjusted earnings before interest, taxes, depreciation, and amortization ('EBITDA') reflect the performance of TMC's base business. Revenues and Adjusted EBITDA have increased significantly following the commercial commencement of the Expanded System on May 1, 2024.
Financial Highlights:
EBITDA: For the three-month period ending March 31, 2025, Adjusted EBITDA increased by $532 million to $568 million, compared to $36 million in the same period of the prior year.
Capital Structure: In December 2024, Canada TMP Finance Ltd., the entity which holds the Government of Canada's investment in TMC, provided funding to repay $17.9 billion of guaranteed third-party debt. The refinancing results in lower interest costs for the Company, making additional funds available to optimize the system, grow, pay down debt or increase returns to its shareholder.
Capital Return: During the first quarter an aggregate of $311 million was paid to Canada TMP Finance Ltd., consisting of $148 million in interest payments and $163 million in cash dividends. These distributions are expected to grow significantly in 2026 and beyond.
Operational Highlights:
Throughput: During the first quarter, the Expanded System had an average daily mainline throughput of approximately 757,000 barrels per day (bpd), including 445,000 bpd to Westridge Marine Terminal, 227,000 bpd to Washington state on the Puget Sound Pipeline and 85,000 bpd to BC delivery points.
Vessel Traffic: For the three-month period ending March 31, 2025, 74 vessels were loaded at Westridge Marine Terminal, including 29 vessels in March marking a new monthly high for the Expanded System's operation. Since the commercial commencement of the Expanded System on May 1, 2024, TMC has loaded 266 vessels at the terminal. Third-party information suggests vessel destinations have been broadly split between the US West Coast and Asia.
Loading Performance: Ship loading performance remains strong. During the quarter, approximately 90 per cent of ships were loaded on time, with delays attributable to vessel operator factors.
Since the commercial commencement of the Expanded System, all deliveries have been subject to the Expanded System tariff and tolls. Contractually committed revenues associated with the 15-and 20-year transportation service contracts covering approximately 80 per cent of the Expanded System's capacity have resulted in a significant increase to transportation volumes, revenues and Adjusted EBITDA.
TMC reported net income of $148 million for the first quarter of 2025, as compared to $158 million in the same period of the prior year. While Adjusted EBITDA reflects the results from the Company's base business, net income incorporates depreciation and amortization expense, as well as the significant financing impacts of the Trans Mountain Expansion Project ('TMEP'), specifically, the equity allowance for funds used during construction ('AFUDC'), interest expense and capitalized debt financing costs.
While net income decreased by $10 million year-over year, the underlying factors changed significantly. Interest expense before capitalized debt financing costs was materially lower, reflecting the recapitalization of TMC's balance sheet in December 2024. However, these savings were offset by increased depreciation and amortization expense, and the cessation of equity AFUDC and capitalized debt financing costs on TMEP following the commercial commencement of the Expanded System.
CEO Comments
'Trans Mountain is demonstrating its strategic value to Canada's economy,' said Mark Maki, Chief Executive Officer, Trans Mountain Corporation. 'Our team remains focused on safe, reliable operations as we complete one year of Expanded System operations. The Expanded System has driven strong value to Canada's energy producers and Canadians overall.' Maki continued, 'This critical infrastructure is opening new global markets for Canadian energy, reducing reliance on a single US market and ensuring long-term economic benefits for Canadians. These results reflect the hard work, commitment to safety and collaboration of our dedicated team.
For the three-month period ending March 31, 2025, the West Texas Intermediate to Western Canadian Select differential averaged US$13 per barrel (bbl), which was US$4 per bbl narrower than the average of US$17 per bbl in Q1, 2024. While the differential does not directly affect TMC's operational or financial performance, the commencement of the Expanded System has contributed to greater egress optionality and improved oil prices for Canadian producers in the Western Canada Sedimentary Basin,' concluded Maki.
See the full financial statements and management report documents here. See CDEV's Quarterly Report here.
Looking Forward
Toll Hearing: TMC continues to operate under an interim toll structure currently before the Canada Energy Regulator (CER). On November 30, 2023, the CER approved preliminary interim tolls for the Expanded System, which remain in effect today. Under the current CER hearing timeline, final arguments are scheduled for late 2025.
Optimization Opportunities: Trans Mountain is exploring both short and long-term optimization projects aimed at increasing pipeline capacity by 200,000 bpd to 300,000 bpd. Potential solutions may include the use of drag-reducing agents to increase flow efficiency, as well as other operational enhancements to improve system capabilities.
Forward-looking information
This news release contains certain statements that constitute forward-looking information within the meaning of applicable Canadian securities laws ('forward-looking information'). Forward-looking information is not historical fact, but instead represents the current expectations of TMC regarding future operating results and other future events relating to TMC, many of which, by their nature, are inherently uncertain and outside of the control of TMC. Forward-looking information can be identified by words or phrases such as 'will', 'may', 'expect', 'anticipate', 'believe', 'intend', 'plan', 'seek', 'aim', 'potential', 'should', 'would' and similar words or expressions. Forward-looking information in this news release includes, but is not limited to, expectations regarding future distributions, potential uses of funds resulting from lower interest costs, expected timing for final arguments for the current CER hearing, potential optimization projects and the expected increase in pipeline capacity resulting from such projects. the opening of global markets for Canadian energy and long-term economic benefits resulting from TMC's infrastructure. Actual results could differ materially from those anticipated in the forward-looking information. The forward-looking information in this news release is based on certain assumptions that TMC has made regarding, among other things: market conditions, economic conditions, prevailing governmental policies, regulatory, tax, and environmental laws and regulations, inflation rates and commodity prices, future demand for space on TMC's pipeline systems, interest, tax and foreign exchange rates and expected cash flows and availability of funds. Although TMC believes the assumptions and other factors reflected in the forward-looking information are reasonable as of the date hereof, there can be no assurance that these assumptions and factors will prove to be correct and, as such, forward-looking information is not a guarantee of future performance. Forward-looking information is subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially, including, but not limited to: the regulatory environment and decisions, including the outcome of regulatory hearings, the available supply and price of energy commodities, TMC's ability to successfully implement its strategic priorities, the operating performance of TMC's pipelines and related assets, performance and credit risk of TMC's counterparties, the geopolitical environment, actions taken by governmental or regulatory authorities, changes in laws, the occurrence of unexpected events such as fires and severe weather conditions, cyber-attacks and other accidents or similar events and adverse general economic and market conditions or other risk factors, many of which are beyond the control of TMC. The foregoing list of assumptions and risk factors should not be construed as exhaustive. The forward-looking information contained in this news release speaks only as of the date hereof. TMC does not undertake any obligation to publicly update or revise any forward-looking information contained herein, except as required by applicable laws. All forward looking information contained in this news release is expressly qualified by this cautionary statement.
GAAP and Non-GAAP measures
We make use of certain financial measures that do not have a standardized meaning under U.S. GAAP because we believe they improve management's ability to evaluate our operating performance and compare results between periods. These are known as non-GAAP measures and may not be similar to measures provided by other entities. The non-GAAP measures discussed above should not be considered as an alternative to or more meaningful than revenues, net income, operating income or other U.S. GAAP measures. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and equity AFUDC) is a non-GAAP measure we use to evaluate our operating performance and is calculated from its most directly comparable U.S. GAAP measure, operating income but excludes the impact of financing decisions, non-cash depreciation and amortization, and non-cash equity AFUDC.
AFUDC (Allowance for Funds Used During Construction) is an amount recognized under U.S. GAAP by rate-regulated entities to reflect a return on the equity and debt components of capital invested in construction work in progress.
About Trans Mountain
Trans Mountain Corporation (together with its wholly-owned subsidiaries, 'Trans Mountain') operates Canada's only pipeline system transporting oil products to the West Coast. Trans Mountain is a wholly owned entity of Canada TMP Finance Ltd., a subsidiary of Canada Development Investment Corporation (CDEV), the entity which holds the Government of Canada's investment in TMC. We have nominal capacity to deliver 890,000 barrels of petroleum products each day through a pipeline system of more than 1,180 kilometres of pipeline in Alberta, British Columbia and 111 kilometres of pipeline in Washington state. Trans Mountain also operates a state-of-the-art loading facility, Westridge Marine Terminal, with three berths providing tidewater access to global markets. As a federal Crown corporation, Trans Mountain continues to build on more than 70 years of experience delivering operational and safety excellence through our crude oil pipeline system. To learn more, visit us at www.transmountain.com.