- Inter Pipeline (TSX:IPL) has released an “all is well” update as markets continue to fall worldwide
- The company says that its financial resilience is underpinned by long-term cash flow from its oil sands transportation arm
- Inter Pipeline generated total EBITDA of C$1.05 billion over the course of last year
- It’s previously announced capital expenditure program for 2020 is expected to be reduced by between $60 million and $120 million
- Inter Pipeline (IPL) is currently up 18.92 per cent to $6.94 per share, with a market cap of $2.93 billion
Inter Pipeline (TSX:IPL) has released an “all is well” update to worried investors as markets continue to fall worldwide.
The Calgary-based petroleum transportation, natural gas liquids processing and bulk liquid storage business has taken a beating over the last few weeks.
However, Inter Pipeline says that its financial resilience is underpinned by long-term, stable cash flow from its oil sands transportation arm. Fluctuations in commodity pricing do not materially affect this type of business, so operations have remained steady.
The company added that its conventional oil pipeline business is supported by fee-based contracts with over 100 producers and shippers.
With a strong base of contracts, Inter Pipeline’s bulk liquid storage business is also reportedly exceeding expectations as demand for infrastructure increases in Europe.
However, the company’s NGL processing business remains under pressure as commodity prices decline.
Christian Bayle, President and CEO of Inter Pipeline, acknowledged the current market difficulties, but is generally optimistic.
“Inter Pipeline’s top priorities remain the health and safety of our workforce, while ensuring the safe and reliable operations of our facilities and pipeline infrastructure.
“Despite a very challenging environment, I am confident in our underlying businesses and high-quality customer base,” he said.
In 2019, the company’s total EBITDA was C$1.05 billion. Current forecasts suggest that earning for 2020 will remain much the same.
“The financial bedrocks of our company are our assets which produce substantial cost-of-service and fee-based cash flow,” added Bayle.
“These assets remain fully operational and continue to generate stable and predictable returns.”
In light of the COVID-19 pandemic, Inter Pipeline also said that it will reduce its previously announced 2020 capital expenditure program by between $60 million and $120 million.
The company said that while policies will be added to deal with the virus, operations will remain more or less the same.
Inter Pipeline (ITP) is currently up 18.92 per cent to $6.94 per share at 12:54pm EST.