Q3 2023 Superior Plus Corp Earnings Call
Good day, and thank you for standing by welcome to the superior plus third quarter 2023 results conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
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Please be advised that today's conference is being recorded.
I would now like to hand, the conference over to your Speaker today, Adam Koenig manager of corporate Finance and Investor Relations. Please go ahead.
Thank you Shannon.
Morning, everyone and welcome to Superior <unk> Conference call and webcast to review our 2023 third quarter results on the call today are Alan Macdonald, President and CEO, Grier, Colter, CFO and curtains Philip on President Retards.
For this morning's call Alan Greer will begin with their prepared remarks, and then we will open up the call for questions.
As a reminder, that some of the comments made today may be forward looking in nature and are based on superior's current expectations estimates judgments projections and risks.
Further some of the information provided refers to non-GAAP measures. Please refer to its appears continuous disclosure documents available on SEDAR, plus and superior's website for further details.
Dollar amounts discussed on today's call are expressed in Canadian dollars unless otherwise noted.
I'll now turn the call over to Alan.
Thanks, Adam.
Good morning, everyone. Please bear with me a little bit of a call today.
I'm very pleased to be meeting with you here today to discuss our results for Q3, which is traditionally a smaller quarter in financial terms, but a significant one this year is our it's our first full quarter, including tariffs.
The close of the acquisition back in May.
We're also welcoming some new members of the team this quarter following our management changes that we announced in September.
As we continue to refine our strategy.
2024 operating directives, we felt it was imperative to ensure that we have the right skills and experiences to lead the transformation of superior plus.
I'm very happy to agriculture, our new CFO Johnson CFO, joining me today with all of you.
Greer by reputation, but his previous experience will be a huge asset for us as we work together to deliver a plan that will drive incremental growth and shareholder value here at superior.
<unk> initial focus on the role would be to understand our opportunities to improve operating efficiencies.
Focus on capital allocation across the board, there's a lot of work to be done, but we have significant opportunities in both regards.
Today were also welcoming Kirsten Olson, our new Chief Human Resource operating officer, who joined in late October.
At superior, we are deliberate and focused when it comes to building a strong team and.
And Christian will make a significant impact in terms of how we continue to attract retain and develop world class talent.
Now as we go into a busy winter season, I'm very pleased with the strength of our management team.
We are encouraged and are welcome additions to our strong leadership group with a specialty talent operational leaders and superior propane answer tariffs.
Before I offer a few comments on the quarter and turn things over to Greer I should reaffirm our priorities as I laid them out on our last call.
We are continuing to be committed to driving shareholder value in our existing businesses.
Superior has a world class set of assets and leadership teams at both operating divisions are committed to delivering incremental organic growth.
At superior propane, Andy and his team are focused on setting new standards of performance for what is arguably already one of the most successful propane companies in North America.
We're continuing to innovate new ideas for building, our customer base organically, optimizing our pricing structure and setting new industry standards for asset utilization and productivity.
At some tariffs Curtis and his team are managing to meet the needs of their customers in a very very busy period of expansion and growth.
As they add new Msu's theyre, serving existing markets, while also adding new customers industry verticals and geographies, all while keeping a watchful eye on our financial performance cost and profitability.
Over the last two months I've been meeting with investors and analysts to share our vision for the organization.
We believe we have the right assets to become the foremost energy distribution company in North America and.
And the transformation from a propane company to a multi solution energy provider is behind us.
Today Superior is firmly established as one of the foremost companies leading the transformation of the energy section sector.
We are enabling efficient carbon reduction everyday.
While ensuring safety of supply for our customers.
In our meetings with investors, we have also been reaffirming our commitment to organic growth, maintaining our dividend, reducing leverage and effective and efficient capital allocation.
Before I turn the call over to Greer for an update on the financial results a few comments of my own on the quarter.
Although Q3 is seasonally the smallest quarter for superior I'm very pleased with the results. We saw strong performance across each of our operating business units in Canada, and the U S and improvements over Q3 of last year, especially in the U S propane distribution business, where some cost savings initiatives to help improve profitability and a slower summer months.
I was also pleased with the improvements with some key messages identified.
As the priority measures, including EBITDA per share and our leverage ratio.
So with that let me turn the call over to Greg for the third quarter results.
Thank you Alan and good morning, everyone.
I'd like to start by saying that my first couple of months here a superior have confirmed the opportunity.
Customers.
And being less aggressive in just acquiring volume and low value customers. So I think youre seeing.
The increase in discipline, which is having a contribution but also.
Some of the normal fluctuations in the business.
Understood.
Yes.
Words in your mouth, but more to come on that front, yes.
Look I don't want to promise massive volume no massive margin changes.
Think of it at the highest level in terms of overall growth because there is some volume opportunities to that we'd like to pursue so but again, it's early days.
It makes sense Curtis just wanted to.
Get your take on the large order.
Matthew since he announced post Q2.
Just could you give us a sense of your line of sight in terms of finding work for that equipment and.
Maybe also just how that equipment will make its way into the fleet over the next 12 months.
Sure.
Yes, so for everybody on the call, we announced that we placed a significant order.
Hexagon for a new product line that they've watched affecting their maximus trailers. So.
What I expect will become the new standard of our fleet the larger volume trailer.
We've got a lot of experience working with hexagon on developing.
Great product and so we're pretty excited about that and so we've got.
By the end of next year, we will have roughly 150 of those maximus units in the <unk> fleet.
So it's pretty exciting to see that we've actually.
Just got the very first ones of that.
<unk> type of arriving into our operations here over the last couple of weeks so.
We're excited to see that and the impact it will have on our efficiencies in the business.
So that's the significance of that part of the large scale of this order is talks to the benefits I think for <unk> now being part of superior that.
Our past, we were probably more apt to place their smaller orders in.
Joining the team here now.
Let's make sure we lock up a consistent and steady supply of MSC is coming into the business and make it a little less chunky and so youll see that large quarter, we placed sort of coming in over over next year evenly over the year.
But presumably visibility to work for that equipment as well.
Absolutely.
We are struggling right now in a sold out situation and trying to keep customers happy and not turn down to many people, but we're definitely we're in an oversold situation right now there is tremendous demand for low carbon energy solutions.
Across a whole bunch of different verticals and so we're having to make some tough decisions on where we go deploy equipment to try and try and satisfy that.
The team is excited to get their hands on this equipment that is definitely ready to go to work.
Makes sense, thanks, everyone I'll turn it back.
Thanks, Karen.
Thank you. Our next question comes from the line of Stephen Hanson with Raymond James Your line is now open.
Oh, yeah. Thanks for the time guys.
And to piggyback off the last answer and just maybe ask about the pricing dynamics you see in the market right now being in a sold out situations, obviously a positive.
Our position to be in but I know that you are still also looking to gain scale. It across the landscape. So how do you think about pricing in the current backdrop and perhaps into 'twenty four as it stands today.
I think it's a good pricing environment for certain areas.
Really strong demand and then we often price against the alternative fuel typically against diesel price against both both from a strong demand perspective, as well as looking forward and see a real strong diesel price going forward as well that provides an opportunity for us to offer a significant.
Discount the customers.
Still generate a strong margin versus theirs.
Okay helpful. Thank you and just going back to your comments on the leverage ratio continuing to make improvements. There I mean have you thought about where you think the optimal level is at this point you referenced that you expect it to continue to improve bounce around a little bit, but improving as the trend.
Again, how do you balance that relative to some of the other priorities you said, where do you feel like the optimal level needs to be.
So you can pursue some of the other levers more aggressively.
Yeah, Hi, it's career here its a great question I think.
Yes, I would say stay tuned and to be fair, we're working through our 2024 plan looking at what we wanted to do is make sure that we.
Commit the right amount of capital to the propane business into the <unk> business and that is of Paramount importance to us.
And then with that maintain and improve on the strengthening our balance sheet and also look at other capital allocation priorities like.
Share buybacks, so nothing prescriptive.
The merits.
Lower leveraged balance sheet are not lost on us they are very clear.
But I think to come out with some type of a prescriptive approach on the target and the timeline at this stage would probably be a little bit premature, but just stay tuned on it because I think we'll give you more as time goes on here, we have the challenge of having <unk>.
Several very compelling capital allocation opportunities.
So we're just working through.
Okay I appreciate that guys. Thanks.
Thank you.
Our next question comes from the line of Nelson <unk> with RBC capital markets. Your line is now open.
Great. Thanks, and good morning, everyone.
First question's for Curtis.
On tariffs can you just comment about the seasonality.
Impacts and the utilization of trucks during Q3.
You mentioned that.
You guys are sold out.
A shortage of trucks, but.
Can you just comment on the seasonality I think obviously Q1 and Q4 is the highest.
That national grid contract is quite profitable, but can you just provide a bit more color.
Sure. Thanks, Thanks Nelson.
Definitely we have some seasonality in our business, though in Q2 and Q3 Youll see US do more road construction type work.
Renewable natural gas opportunities as well that we haven't got a little bit more active on in those Q2 and Q3 months in Q1 and Q4, we have some great utility work that we do as well as given the fairly significant heating heat related opportunities and sort of the northern U S and in Canada. So you always get this.
Did a unique dynamic on the tail end of Q3 and the early part of Q4, where you have a bit of a pivot and how the msos are deployed and so youre coming off of some of that road construction type work and going into some of these heat related work.
The utility work and so theres a bit of a transition period through the back end of September October as youre getting into that and so we'll we're starting to see the sort of true winter numbers starting to come at US, which is always our busiest time of year and you really see that in Q1 for us and that you get sort of a full a full quarter.
Running at that.
At peak rate.
Okay. Thanks.
And then in terms of maybe it's for career, but.
So growth Capex I think it was about 20 or $28 million in Q3.
Up from $15 million last year, so I presume most of the increase if not all is Alec that's due to some <unk> growth capex and as will Q4, it looked like Q3.
I mean, the Capex will be I think certainly higher for some tariffs in Q4.
MSU deliveries in Q3 were pretty low as a result of the ordering schedule and the way. It there'll be produced so you could expect us to tariffs capex to be quite a lot higher.
In Q4, and it will represent the majority of the growth Capex in Q4.
Okay got it.
And then just one last question for Curtis in terms of the.
MSC is deployed.
Are you seeing.
And the last year on your expectation next year.
Are you seeing any.
Pacific.
Areas or industries, where you are going to be allocating more MSG as going forward.
Or do you think that the.
The mix will stay roughly the same.
I think the mix for us has changed a bit over time historically the tariffs started with.
Almost entirely on oil and gas customer base that continues to be a great part of our business that's growing.
Quite quite strongly but we made a shift a few years back to say, we recognized the real importance of diversifying the business into a number of different verticals and just grow the overall opportunities that are out there and we've been sort of paying our dues grow in these different industry verticals and to the point now or over the last three years the majority of the capital.
We've deployed has been going into these beyond the well site type applications and so I think.
You are seeing some really interesting growth opportunities.
Within oil and gas is a great business for you to still see growth was in that but we're also seeing some really impressive growth in the utility segment is theres just a lot of it infrastructure challenges right across North America that utilities are struggling with and we can help them to bridge those gaps we're seeing a tremendous amount of growth on the renewable natural gas side of the business where.
There is a lot of capital being deployed into renewable natural gas project development and the bulk of those projects are not pipeline connected and so they need a way to go actually get that gas to the pipeline and so tariffs offer us a great solution to do that and so we're starting to see more of those projects come online.
It becomes a pretty significant deployment of MSC is for us.
And the biggest one potentially that I think we're still really early on as we look at remote power generation is being just a tremendous growth lever for us that there is a significant diesel remote power generation market out there today and I expect over the next few years as you look at that that youre going to see.
Migration of that over away from diesel towards natural gas generation that I think that's going to create a tremendous growth like we're seeing some great projects out of that already today, but I think we're just really early start to that and so hence the strategy to deploy keep on growing all segments of this but we've been consistently sort of.
Putting more than half of our capital needs beyond the wall state applications months years.
Okay. Thanks, Curtis I'll, just squeeze one more question.
I might be for Alan Greer, but.
Eight propane sites in northern Ontario, I think the MD&A indicated that you're.
Spectrum to divest those assets in Q4 of this year can you just provide a quick update as to.
Where are you or is it just is it just paperwork now and those and those sites will will get sold.
Yes. It is.
We're here so.
You can expect this to happen in the fourth quarter.
And we will provide a bit more information.
On it but.
Yes.
Yes, I guess as you say, it's paperwork, it's kind of it's highly likely that this.
This will happen.
The levels that you see in the MF.
In our financials.
Great. Thanks, I'll leave it there thanks.
Thanks Bill.
Thank you. Our next question comes from the line of Ben Isaacson with Scotiabank. Your line is now open.
Thank you very much and good morning, everyone. Two questions first one for Alan Alan You said that you have been meeting with investors and analysts over the last couple of months.
One of the key messages that you've received from the investment community.
And in depth perception rightly or wrongly, what's working and what's not working.
Great question, Hey, Ben.
Yes.
It's interesting I think so what we've been hearing is.
I would think.
Two things resoundingly.
Investors are pleased.
That they see a company with a strong asset base and a runway or a pathway to.
A very.
A very.
Profitable and.
And successful future because we've now got the ability to expand into an emerging market with energy transformation on.
On the back of a cash generation engine that superior, which I think arguably is quite well run in their view.
And a growth engine its tariffs.
So I think what's working is while the bones of this organization are really strong.
I think that.
The investors.
Investors and we see this with our institutional investors that we are very very patient investor group, which probably reflects the volume liquidity that we have.
Trading volume on a day to day basis, but.
There is a bit of wait and see where.
This new organization in its current form you got a new management team.
Our history of.
Some strategic surprises.
So I think more than anything else investors, saying, Hey can you give us continuity.
Can you continue to talk about this strategy can you deliver on your promises can you give us a level of consistency and transparency and we're more than happy to come along on the journey with you.
Curtis in Greer and they have been in these meetings too, but I've got to tell you. They are very positive and I.
I'd hate to use the phrase wait and see because I think it's much more positive than that but I think our investors are looking for.
Sure.
Some time of continuity and consistency from us.
That makes a lot of sense. Thank you for that and then just second question.
Which is an operational one on the tourists.
Just looking at page 17 of your MD&A, which is done.
Results and I see that your EBITDA went down to about $54000 per MSU.
In Q3 versus about 74000 since acquisition and.
When I scroll up I see that it's really revenue that has declined for MSU.
Why is that and how should we think about revenue per MSC going forward or in a steady state type of environment. Thank you so much.
Sure.
The one thing to watch when you look at the revenue number is just know that.
By the nature of our contracts, we don't take natural gas commodity risk exposure and so the revenue number will go up and down at times, depending on what the natural gas price is doing and how much gas price were flowing through and so Q3 last year at a significantly higher natural gas prices that were flowing through versus this year, but you will see that on actual.
Sort of EBITDA per ml Btu delivered pretty consistent.
And so.
So we've we focus much more on what are the the EBIT generated.
<unk> in the fleet and <unk> delivered as we focused in on versus the revenue numbers that one can bounce around with the commodity price.
From our appointment.
From an EBITDA per MSU perspective for the quarter Q3 is a quieter quarter for tariffs and so thats that is there is some seasonality to this.
<unk>.
The quarterly EBIT for MCU number has been stronger than our Q Q1 in particular in Q4 as well.
Have you talked about what the run rate should be.
On EBITDA per MSU over the course of the year.
We do like we target that we've been very simple terms the way we like to think about our businesses that are MSU is have a.
15 year life, and we target to payback, our MSC is our direct msu's in under three years and so that's how we'd look at our our business. So the direct them as use of a payback of under three years. There are some ancillary capital that goes.
Around to be able to support the business as the tractors to pull the MSU they need the compression stations in the decompression units and so if you fully load up all the other capital.
Round that you need to support the misuse, we target effectively a sub five year payback on the capital that we deploy.
And then give sort of effectively 10 years of free cash flow on those assets. When you factor in a 15 year life and so that's why we look at the business and so that means you end up with us or EBITDA generated per MSU I believe were in that 270, some thousand dollars range. This year.
Somewhere in the mid two hundreds to high two hundreds is where we've seen the number.
Great. Thanks, so much appreciate it.
Thanks, Matt.
Thank you. Our next question comes from the line of Robert <unk> with CIBC capital markets. Your line is now open.
Okay. Thank you for your comments so far this morning.
Most of my questions were answered so im down to nitpicking here.
So can you.
Give a little more clarity onto why you dropped the <unk> metric.
Yes, maybe I'll take that one Robert it's clear.
This really I mean, this is a very simple calculation.
Super straightforward you basically subtract two numbers so I think.
When I was having a look at it and just looking at all the extra disclosure.
In the press release, but more so in the MD&A. There was a ton of pages really they were there primarily because of this metric, which as I say.
It's very easy to calculate.
So that was kind of the primary reason for it is a non industry standard metric. If you look at the competitive set how we wanted to find out I guess, we could debate, but there is no one really that uses those metrics. So really those two reasons, we're the number one.
The objective here is for us to to be simpler and the way we report.
Make it easier for everybody to understand what it is that we're doing and what we're focused on.
And not hiding about anything and as I say you can you can clearly take these numbers off the face of the financials.
The adjusted OCI for.
For this quarter was negative $19 four if you compare that to the prior year was negative $32 nine so it is an improvement.
And as I say the interest in taxes number you can pull it off the face of the statements. So yes, I mean, it was long winded answer but bottom line is for us to just get more streamlined and simple and make it easier for everyone to understand what it is we're trying to do.
Sure.
Okay.
Just one more detailed question here.
Metairie and MD&A about some there's still there's still a customer.
Attrition can you just.
Give a description of what's happening there.
Well this is just.
I'll, let me offer a comment or two Robinson grew up when we get the remnants of some small distillate business that.
As obviously.
Declining at a faster rate than.
The propane business and really is noncore to us and it's really a hangover.
From from a past life, if you will it's not.
Non core.
We're managing it very very carefully obviously, but for us it is.
It's a business that.
We will see an extra two at some point and be opportunistic in terms of the journey from here to there.
And making sure we we don't invest anymore in it but also maximize the value. So for us really it's a very very small part of the business, but no great surprise, it's an engine.
Steady decline.
Greg if you want to add anything to that.
I thought you said it well so yes, it's a business that declines faster than.
Declines in the other so tariffs obviously is.
Great growth business I think the propane business more like a we will see what we can do with it but it has had more of a flattish type business, but just on the business as a as a declining business as Alan said it's.
It's a small percentage of the business momentum I represent Brian just I think around 10% or something less so in the U S business. So.
So it's not not huge but.
Yes, that's what it is it's just a it's a different market Diana for that business. So obviously not an area of focus for us as we look forward.
Right. So just secular decline in that specific product.
That's right that's right yes.
Okay.
You don't fight it because it's.
It's market driven sorry go ahead Jim.
Yes.
Final question for you.
I Wonder if you had any updates in terms of.
Your plans of aligning incentives with Pierre.
With your targets and I'm thinking in terms of stock ownership requirements and any other.
Incentives that might help you.
Just the line activities with the ultimate goal of bringing more out of existing assets.
Sorry.
You are talking about.
Executive compensation.
Yes, yes.
Yes, just how you're aligning all the incentives across the organization, particularly.
Stock ownership at the executive level.
Yeah, Okay, well a couple of updates there.
Kirsten joined US two weeks ago.
We've already kicked off a review of our executive compensation and the not generally speaking in terms of its competitiveness, but its alignment to the aspirations to drive significant shareholder value.
Appreciation in the share price.
<unk>.
Which is not a simple thing when you're talking about a high yield stock like ours that is our kind of liquidity and trading volume.
No.
<unk>.
In the middle innings of that review.
Additionally, we've also.
Made a decision in the last couple of weeks that so tariffs as a private company had a history of share ownership that was really deep.
And it was a point of pride, but also I think one of the Differentiators that made the teammates in terms, just so engaged and doing the right thing for the customers and for the company all the time.
Bringing that kind of a comp structure in a public company isn't easy.
And.
It requires a lot of.
Sure.
Some.
Of adjustments in terms of how we think about comp but over the last few weeks. We've made the decision announced that internally that we're actually going to maintain.
Share ownership as part of incentive for the entire team it's a terrace.
That was that was part of that program, which would be sort of the top two thirds of the organization.
So we're really committed to making sure that everybody that works at superior has every opportunity to be to.
To be a participant in shareholder value creation is our number one and one could argue our only objective.
As long term shareholder value creation. These are the owners of the company and we need to deliver for them.
We want our employees to be to be part of that community, whether it's through share ownership programs or through share based incentives.
And we want our executives to be <unk> based on the success that they deliver for our shareholders. So.
We're really committed to this you're seeing it at the operating level Youll see it at the executive level, but likely not until the management information circular next year.
Okay.
Does that answer your question, yes. It does thank you.
Good answer thanks.
Thanks for the question.
Thank you and I'm showing no further questions at this time I'd like to hand, the call back over to Alan Macdonald for closing remarks.
Well, thanks, everyone look it's always a pleasure to talk to you all whether it be on this quarterly call or in our meetings and the <unk>.
Intervening weeks I can't thank you enough.
For your interest in the organization for your questions and for your feedback.
I want you to know that.
We've got thousands of people here at superior showing up to work every day really excited about the opportunities in front of us.
<unk> terrace, and the team at <unk>.
The propane division have been working really well together and we're excited about the future and.
We're just really really pleased to be able to tell the story. We think of Q3 is a real turning point and successful one for us for a whole bunch of reasons operationally and strategically.
We're looking forward to Q4 and speaking to you all again in February.
Thank you very very much.
This concludes today's conference call. Thank you for participating you may now disconnect.
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Yes.
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Good day, and thank you for standing by and welcome to the Superior plus third quarter 2023 results conference call. At this time, all participants are in a listen only mode.
After the speaker's presentation, there will be a question and answer session.
Ask a question during the session you will need to press star one one of your telephone.
You will then hear an automated message advising your hand is raised to withdraw your question. Please press star one again please.
Please be advised that today's conference is being recorded.
I would now like to hand, the conference over to your Speaker today, Adam Karnik manager of corporate Finance and Investor Relations. Please go ahead.
Thank you Shannon.
Everyone and welcome to Superior <unk> Conference call and webcast to review our 2023 third quarter results on the call today are Alan Macdonald, President and CEO Grier Colter CFO and current spill upon president us retirees for.
This morning's call Alan Greer will begin with their prepared remarks, and then we will open up the call for questions.
Listeners are reminded that some of the comments made today may be forward looking in nature and are based on superior's current expectations estimates judgments projections and risks.
Further some of the information provided refers to non-GAAP measures. Please refer to its appears continuous disclosure documents available on SEDAR, plus and superior's website for further details.
Dollar amounts discussed on today's call are expressed in Canadian dollars, unless otherwise noted I will now turn the call over to Alan.
Thanks, Adam.
Good morning, everyone. Please bear with me a little bit of a call today.
I'm very pleased to be meeting with you here today to discuss our results for Q3, which is traditionally a smaller quarter in financial terms, but a significant one this year is our it's our first full quarter, including tariffs following the close of the acquisition back in May.
We're also welcoming some new members of the team this quarter following our management changes that we announced in September.
As we continue to refine our strategy and 2024 operating directives. We felt it was imperative to ensure that we have the right skills and experiences to lead the transformation of superior plus.
I am very happy to agriculture, our new CFO joins <unk> CFO joining me today with all of you now.
Now many of you know greer by reputation, but his previous experience will be a huge asset for us as we work together to deliver a plan that will drive incremental growth and shareholder value here at superior.
<unk> initial focus on the role will be to understand our opportunities to improve operating efficiencies.
And focus on capital allocation across the board, there's a lot of work to be done, but we have significant opportunities in both regards.
Today were also welcoming Kirsten Olson, our new Chief Human Resource operating officer, who joined in late October.
At superior we are deliberate and focused when it comes to building a strong team and Chris and I will make a significant impact in terms of how we continue to attract retain and develop world class talent.
Now as we go into a busy winter season, I'm very pleased with the strength of our management team.
Greer incursion are welcome additions to our strong leadership group with especially talented operational leaders and superior propane and so tariffs.
Before I offer a few comments on the quarter and turn things over to Greer I should reaffirm our priorities as I laid them out on our last call.
We are continuing to be committed to driving shareholder value in our existing businesses.
Superior has a world class set of assets and leadership teams at both operating divisions are committed to delivering incremental organic growth.
At superior propane, Andy and his team are focused on setting new standards of performance for what is arguably already one of the most successful propane companies in North America.
They're continuing to innovate new ideas for building, our customer base organically, optimizing our pricing structure and setting new industry standards for asset utilization and productivity.
At some tariffs Curtis and his team are managing to meet the needs of their customers in a very very busy period of expansion and growth.
As they add new Msu's theyre, serving existing markets, while also adding new customers industry verticals and geographies all of them.
While keeping a watchful eye on our financial performance cost and profitability.
Over the last two months I've been meeting with investors and analysts to share our vision for the organization.
We believe we have the right assets to become the foremost energy distribution company in North America and.
And the transformation from a propane company to a multi solution energy provider is behind us.
Today Superior is firmly established as one of the foremost companies leading the transformation of the energy section sector.
We are enabling efficient carbon reduction everyday.
While ensuring safety of supply for our customers.
In our meetings with investors, we have also been reaffirming our commitment to organic growth, maintaining our dividend, reducing leverage and effective and efficient capital allocation.
Before I turn the call over to Greer for an update on the financial results a few comments of my own on the quarter.
Although Q3 is seasonally the smallest quarter for superior I'm very pleased with the results. We saw strong performance across each of our operating business units in Canada, and the U S and improvements over Q3 of last year, especially in the U S propane distribution business, where some cost savings initiatives to help improve profitability and a slower summer months.
I was also pleased with the improvements in some key measures was identified as the priority measures, including EBITDA per share and our leverage ratio.
So with that let me turn the call over to Greg for the third quarter results.
Thank you Alan and good morning, everyone.
I'd like to start by saying that my first couple of months here a superior have confirmed the opportunity that I thought was here to grow this business and create value for our shareholders.
We've got work to do but we are starting with a very strong asset base and a rare organic growth engine and so tariffs.
As we execute on our operational plans and bring a renewed focus to capital allocation I am confident that the superior story will become clear to the market and I'm excited to be part of it.
Moving into results for the quarter overall superior delivered a strong third quarter with adjusted EBITDA of $25 8 million.
This represents an increase of $34 6 million compared to the prior year quarter driven from the contribution from some tariffs and higher adjusted EBITDA from the propane distribution businesses, partially offset by higher corporate costs.
Our third quarter net loss of $107 8 million compares to a net loss of $206 9 million in the prior year quarter similar to our growth in EBITDA year over year. The primary driver for the improvement here was higher gross profit.
We also saw a better result on derivatives and foreign currency translation of borrowings compared to prior year, all partially offset by higher SG&A and higher finance expenses.
Turning now to the individual business results.
<unk> achieved record adjusted EBITDA in the third quarter of $35 5 million growing at approximately 19% over the prior year comparator.
The growth was primarily driven by a larger MSU fleet versus prior year and better utilization of the Nlcs.
Sure.
We continue to add MSU and expect to end the year with over 700, and our fleet approximately four times that of our nearest competitor.
The U S propane business produced adjusted EBITDA for the third quarter of negative $5 8 million, which was an increase of $5 1 million compared to the prior year quarter.
The business achieved higher average unit margins in the quarter, partially offset by lower sales volumes.
The Canadian propane business produced $4 3 million of adjusted EBITDA in the third quarter modestly higher than the prior year quarter.
The increase was primarily due to higher average unit margins similar to the U S business.
Partially offset by lower sales volumes.
And recall that weather variances are less impactful in the third quarter due to lack of heating demand.
Wholesale propane generated adjusted EBITDA of $1 5 million in the third quarter, a decrease of $3 6 million compared to the prior year driven by higher freight.
And to a lesser extent the impact of a weaker Canadian dollar on the translation of U S denominated transactions.
So overall, we're very pleased with the performance of our businesses in the quarter.
Turning to corporate results leveraging guidance corporate administration costs in the second quarter of $10 1 million and.
An increase of $3 9 million compared to the prior year quarter due to higher insurance costs and higher long term incentive plan costs related to the change in share price in the prior year quarter.
Superior realized a gain on foreign exchange hedging contracts of $4 million modestly higher than the loss in the prior year quarter as superior as average hedge rates were higher relative to the U S dollar rate in the current quarter.
Our leverage ratio for the trailing trailing 12 months ended September 30 was three seven times, which is significantly lower for three times in the prior year and while this number will move around somewhat from quarter to quarter due to seasonal nature of this business. Our objective is to continue to improve this metric over time.
To ensure the company has the financial flexibility to run the business and take advantage of opportunities from a capital allocation standpoint.
We are maintaining our 2023 pro forma adjusted EBITDA guidance range at $6 30 to 670, which includes or tariffs.
On a full year adjusted EBITDA basis in the range of $185 to 195.
Youll notice that we have introduced a new metric in our third quarter results adjusted EBITDA per share.
Which is consistent with our goal of providing simpler shareholder metrics.
Adjusted EBITDA per share for the third quarter was <unk> <unk> compared to negative <unk> in the prior year quarter.
We have also filed our notice of intention to commence an NCI b with <unk>.
Which will start on November 10th and provide us with another year of Optionality to opportunistically execute on accretive share buybacks.
And lastly, the board has approved a quarterly dividend of <unk> 18 per share.
And with that I'd like to turn the call over for Q&A.
Thank you.
As a reminder to ask a question. Please press star one one of your telephone and wait for your name to be announced.
To withdraw your question. Please press star one again.
Please standby, we compile the Q&A roster.
Okay.
Our first question comes from the line of Gary Ho with de Chardan. Your line is now open.
Thanks, Good morning, maybe just a follow up on you.
Comments here, we are just on the CIB that was renewed.
Wondering your thought process on the repurchases how active you'll be just given the.
The dividends that you have in net growth capex commitments.
Yes, Hi, Gary.
Good question I think at this point.
What I would say more generally is.
We see a lot of value in the shares we see it as a top capital allocation priority to be fair, we're still fine tuning.
Our capital plan for.
For 2024, and as a result, it's hard for us to get out specific numbers, but.
As I say, we look at this as a top priority.
Priority <unk>.
If you look at that aside.
Investing in our business organically, which is also a top priority in managing our balance sheet and looking at leverage those are also either with it but to be fair. We just haven't done all the work to figure out on the organic capex side.
Which obviously will have an impact on how much we would be able to buyback. So that's what I'd say, but it's up there is a top priority as maybe the summary.
Okay, and then maybe just follow on that high level question.
April both Alan and yourself.
If you look out to 'twenty four just thoughts on updating the street on any strategy shifts or changes in capital allocation priorities, perhaps an industry event and eclipse into kind of what you and board are looking at.
So Gary.
Short answer is no there's not going to be any change to the strategic shifts if I understand your question right.
We are.
We're going to be coming out with more and more detailed version of the strategy, we've been talking to all of you.
In.
Late Winter post most likely post February results.
But.
Sure.
Our vision right now is very consistent with what we've been talking about it.
Driving organic growth looking at operational effectiveness and propane invest in the capital we have.
Getting the balance sheet even more.
More conservative so no you shouldnt expect any.
Any abrupt changes what I can tell you categorically, we're not planning any abrupt changes.
World can turn obviously, if it does we'll respond but that's where we're at right now.
Can you hear me, okay by the way Gary Yes.
Yes again, yes.
And then maybe just that comp question for Curtis perhaps.
Some lines, maybe give us an outlook on the hub build outs over the next 12 months.
Maybe geographically where you are looking at.
Maybe.
Youre getting any client segment.
Sure.
Gary Yes, we are.
Yes.
Given the typical locations we've got a couple of sites underway under development right now, but strategically the way we think about it as we target to add add or increase capacity at existing sites about four times in a year and so we're actively always out there looking at developing a number of different.
Thanks.
Open up new markets.
In particular, we're looking at sort of on the east and West coast of the U S or some other priorities right now.
But we have we got more to come in a future call on that.
Okay. Thanks, very much guys my questions.
Thanks, guys.
Thank you. Our next question comes from the line of Aaron Macneil with TD Cowen. Your line is now open.
Hey, good morning, and thanks for taking my questions Alan you sort of referenced it in her prepared remarks, but it looks like there's been some.
Pretty encouraging propane unit margin improvements in the quarter across all of the propane segments.
I'm just wondering if this is a function of some of the organizational effectiveness and price optimize that.
Optimization efforts that you've spoken about in the past.
If it is how long far along are you on that initiative.
I would say hey, erinn. Thanks.
Thanks for the question.
I would chalk that up to.
Two full I think it is.
A little bit of opportunism, and you always have to think about the margin too in the in the context of the mix between wholesale and consumer and industrial because that all those will create fluctuations.
But.
Careful so primarily a little bit of mix and just good fortune in the other pricing management of course, but.
But the other is.
It's very early days in terms of driving operational changes. These things take a lot of time, because they are really on the back of new capabilities.
But some of the earlier signs are you seeing you are having an impact his attention and focus on things like cost management.
Being conservative around retaining high value customers and being less aggressive in just acquiring volume and low value customers. So I think youre seeing.
The increase in discipline, which is having a contribution but also.
Some are normal fluctuations in the business.
Understood. So.
Yes, not to put words in your mouth, but.
More to come on that front, yes.
Look I don't want to promise massive volume no massive margin changes.
Think of it at the highest level in terms of overall growth because there is some volume opportunities to that we'd like to pursue so but again, it's early days.
Makes sense Curtis.
Just wanted to.
Get your take on the large order.
Misuse since he announced post Q2.
Just could you give us a sense of your line of sight in terms of finding work for that equipment and.
Maybe also just how that equipment will make its way into the fleet over the next 12 months.
Sure.
Yes.
For February and the cost we announced that we placed a significant order.
Hexagon for a new product line that they have launched effectively they're maximus trailer so.
What I expect will become the new standard of our fleet the larger volume trailer.
We've got a lot of experience working with hexagon on development.
Great product and so we're pretty excited about that and so we've got.
By the end of next year, we will have roughly 150 of those maximus units in the <unk> fleet.
So it's pretty exciting to see that we've actually.
<unk> got the very first one of that.
Type of arriving into our operations here over the last couple of weeks so.
We're excited to see that and the impact it will have on our efficiencies in the business.
So that's the significance of that in.
Part of the large scale of this order is talks to the benefits I think for <unk> now being part of superior that in our past, we were probably more apt to place our smaller orders in.
Joining the team here now.
<unk>, let's make sure we lock up a consistent and steady supply of MSC is coming into the business and make it a little less chunky and so youll see that large quarter, we placed the sort of coming in over over next year evenly over the year.
But presumably visibility to work for that equipment as well.
Absolutely.
We are struggling right now in a sold out situation trying to keep customers happy and not turn down to many people, but we're definitely we're in an oversold situation right now there is tremendous demand for low carbon energy solutions.
Across a whole bunch of different verticals and so we're having to make some tough decisions on where we go into play equipment to try and try and satisfy that.
The team is excited to get their hands on this equipment that is definitely ready to go to work.
Makes sense, thanks, everyone I'll turn it back.
Thank you.
Thank you. Our next question comes from the line of Stephen Hanson with Raymond James Your line is now open.
Yeah. Thanks for the time guys.
Im going to piggyback off the last answer and just maybe ask about the pricing dynamics you see in the market right now being in a sold out situation is obviously a positive.
That position to be in but I know that you are still also looking to gain scale. It across the landscape. So how do you think about pricing in the current backdrop and perhaps into 'twenty four as it stands today.
Yes, I think it's a good pricing environment for tariffs or not really.
Really strong demand and then we often price against the alternative fuel typically against diesel price against though both both from a strong demand perspective, as well as looking forward and see a real strong diesel price going forward as well that provide an opportunity for us to offer a significant.
Discount the customers.
But still generate a strong margin versus theirs.
Okay helpful. Thank you and just going back to your comments on the leverage ratio continuing to make improvements. There I mean have you thought about where you think the optimal level is at this point you referenced that you expect it to continue to improve bounce around a little bit, but improving as the trend.
How do you balance that relative to some of the other priorities you said, where do you feel like the optimal level needs to be so.
So you can pursue some of the other levers more aggressively.
Yes, hi, its career here its a great question I think.
Yes, I would say stay tuned to be fair, we're working through our 2024 plan looking at what we wanted to do is make sure that we.
Commit the right amount of capital to the propane business into the <unk> business and that is of Paramount importance to us.
And then with <unk> maintain and improve on the strengthening our balance sheet and also look at other capital allocation priorities like.
Share buybacks, so nothing prescriptive.
The merits.
Our lower leverage balance sheet are not lost on us theyre very clear.
But I think to come out with some type of a prescriptive approach on the target and the timeline at this stage are probably be a little bit premature, but just stay tuned on it because I think we'll give you more as time goes on here, we have the challenge of having <unk>.
Several very compelling capital allocation opportunities.
So we're just working through.
Okay I appreciate that guys. Thanks.
Thank you.
Our next question comes from the line of Nelson <unk> with RBC capital markets. Your line is now open.
Great. Thanks, and good morning, everyone first question for Curtis.
On some tariffs can you just comment about the seasonality.
Packs and the utilization of trucks during Q3, I know you mentioned that you got.
They're sold out.
There is a shortage of trucks, but can.
Can you just comment on the seasonality I think obviously Q1 and Q4 is the highest.
That national grid contract is quite profitable, but can you just provide a bit more color.
Sure. Thanks, Thanks Nelson.
Definitely we have some seasonality in our business in Q2, and Q3 Youll see us do more road construction type work.
And then there is the renewable natural gas opportunities as well that we haven't got a little bit more active on in those Q2 and Q3 months in Q1 and Q4, we have some great utility work that we do as well as given the.
Fairly significant heating heat related opportunities and sort of the northern U S and in Canada. So you always get this did a unique dynamic on the tail end of Q3 and the early part of Q4, where you have a bit of a pivot in how the MSC user deploy it and so youre coming off of some of that road construction type work and going into.
Do some of these heat related work.
And the utility work and so theres a bit of a transition period through the back end of September October as youre getting into that and so we'll we're starting to see the sort of true winter numbers starting to come at US, which is always our busiest time of year and you really see that in Q1 for us and that you get sort of a full a full quarter.
We're running at that.
Right.
Okay. Thanks.
And then in terms of maybe it's for career, but.
Yep.
So growth Capex I think it was about 20 or $28 million in Q3.
Up from $15 million last year, so I presume most of the increase if not all is Alec that's due to some <unk> growth capex and as will Q4, it looks like Q3.
I mean, the Capex will be I think certainly higher for some tariffs in Q4.
<unk> deliveries in Q3 were pretty low as a result of the ordering schedule and the way. It there'll be produced so you could expect us to tariffs capex to be quite a lot higher.
In Q4, and it will represent the majority of the growth Capex in Q4.
Okay got it.
And then just one last question for Curtis in terms of the.
MSC is deployed.
Are you seeing.
And the last year on your expectation next year.
Are you seeing any specific.
Areas or industries, where you are going to be allocating more MSC is going forward.
Or do you think that the.
The mix will stay roughly the same.
I think the mix for us has changed a bit over dilate historically, they are tariffs that started with.
Almost entirely on oil and gas customer base that continues to be a great part of our business that's growing.
Quite quite strongly but we made a shift a few years back to say, we recognized the real importance of diversifying the business into a number of different verticals and just grow the overall opportunities that are out there and we've been sort of paying our dues grow in these different industry verticals and to the point now or over the last three years the majority of the capital.
We've deployed has been going into these beyond the well site type applications and so I think.
You are seeing some really interesting growth opportunity is.
Within oil and gas is a great business very to still see growth was in that but we're also seeing some really impressive growth in the utility segment is theres just a lot of the infrastructure challenges right across North America that utilities are struggling with and we can help them bridge those gaps we're seeing a tremendous amount of growth on the renewable natural gas side of the business where.
There is a lot of capital being deployed into renewable natural gas project development and the bulk of those projects are not pipeline connected and so they need a way to go actually get that gas to the pipeline and so terrorist offer us a great solution to do that and so we're starting to see more of those projects come online.
Becomes a pretty significant deployment of MSC is for us.
And the biggest one potentially that I think we're still really early on as we look at the remote power generation is being just a tremendous growth lever for us that there is a significant diesel remote power generation market out there today and I expect over the next few years as you look at that that youre going to see.
Migration of that over away from diesel towards natural gas generation that I think that's going to create a tremendous growth like we're seeing some great projects out of that already today, but I think we're just really early start to that and so hence the strategy to deploy keep on growing all segments of this but we've been consistently sort of.
Putting more than half of our capital needs beyond the wall state applications months years.
Okay. Thanks, Curtis I'll, just squeeze one more question.
I might be for Alan Greer, but.
The eight propane sites in northern Ontario, I think the MD&A indicated that you're expecting to divest those assets in Q4 of this year can you just provide a quick update as to.
Where are you or is it just is it just paperwork now and those and those sites will will get sold.
Yes, it's Greg here so.
Expect this to happen in the fourth quarter.
And we'll provide a bit more information on it but.
Yes.
Yes, I guess as you say, it's paperwork, it's kind of it's highly likely that this.
This will happen.
The levels that you're seeing in.
In our financials.
Great. Thanks, I'll leave it there thanks.
Thanks Bill.
Thank you. Our next question comes from the line of Ben Isaacson with Scotiabank. Your line is now open.
Thank you very much and good morning, everyone. Two questions first one for Alan how are you said that you have been meeting with investors and analysts over the last couple of months.
One of the key messages that you've received from the investment community.
And in their perception rightly or wrongly whats working and whats not working.
Great question, Hey, Ben.
Yes.
It's interesting I think so what we've been hearing is.
I would think.
Two things resoundingly that investors are pleased.
That they see a company with a strong asset base and a runway or a pathway.
<unk>.
A very.
A very.
Profitable and.
And successful future because we've now got the ability to expand into an emerging market with energy transformation on.
On the back of a cash generation engine that superior, which I think arguably is quite well run in their view.
And a growth engine its tariffs.
So I think what's working is while the bonds of this organization are really strong.
I think that.
The the investors and we see this with our institutional investors that we are very very patient Investor group, which probably reflects the volume liquidity that we have around our trading volume on a day to day basis, but.
There is a bit of wait and see where this.
This new organization in its current form you got a new management team.
History of.
Hum.
Some strategic surprises, so I think more than anything else, our investors, saying, Hey can you give us continuity.
Can you continue to talk about this strategy can you deliver on your promises can you give us a level of consistency and transparency.
And we're more than happy to come along on the journey with you and I don't know Curtis in Greer and they have been in these meetings too, but I got to tell you. They are very positive and I'd hate to use the phrase wait and see because I think it's much more positive than that but I think our investors are looking for.
Some time of continuity and consistency from us.
That makes a lot of sense. Thank you for that and then just second question.
Which is an operational one on tariffs I'm just looking at page 17 of your MD&A, which is done.
Results.
You bet your EBITDA went down to about $54000 per MSU.
In Q3 versus about 74000.
Position and when I scroll up I see that it's really revenue that has declined for MSU.
Why is that and how should we think about revenue per MSU going forward or in a steady state type of environment. Thank you so much.
Sure I think the one thing to watch when you look at the revenue number is just know that by the nature of our contracts, we don't take natural gas commodity risk exposure and so the revenue number will go up and down at times, depending on what's the natural gas price is doing and how much gas price are flowing through and so Q3 last year.
At a significantly higher natural gas price that were flowing through versus this year, but you will see that on actual sort of EBITDA per MB to you delivered pretty consistent.
So we've.
We focus much more on what are the the EBITDA generated.
Per MSU in the fleet and <unk> delivered is what we focus in on versus the revenue numbers that one can bounce around.
Entity price.
From our appointment.
From an EBITDA per MSU perspective for the quarter Q3 is a <unk>.
Quieter quarter versus garrison so that that is there is some seasonality youll see that.
The quarterly EBIT for MCU number has been stronger than our Q Q1 in particular in Q4 as well.
Have you talked about what the run rate should be on EBITDA per MSU over the course of the year.
We do like we target that we've been very simple term is the way we like to think about our businesses that are MSU is have a.
15 year life, and we target two to payback our MSC is our direct msu's in under three years and so that's how we'd look at our our business. So the direct them as use of a payback of under three years. There are some ancillary capital that goes.
Around to be able to support the business as the tractors to pull the MSU they need the compression stations in the decompression units and so if you fully load up all of the other capital.
Around that you need to support the misuse, we target effectively a sub five year payback on the capital that we deploy and then give sort of effectively 10 years of free cash flow on those assets. When you factor in a 15 year life and so that's how we look at the business and so that means you end up with us or EBITDA generated per MSCI Bill.
We were in that 270, some thousand dollars range this year.
Somewhere in the mid two hundreds to high two hundreds is where we've seen the number.
Great. Thanks, so much appreciate it.
Thanks, Matt.
Thank you. Our next question comes from the line of Robert <unk> with CIBC capital markets. Your line is now open.
Okay. Thanks for your comments so far this morning.
Most of my questions were answered so im down to nitpicking here.
So can you give a little more clarity onto why you dropped the ocs metric.
Yes, maybe I'll take that one Robert it's clear.
This.
I mean this is a very simple calculation.
Super straightforward you basically subtract two numbers so I think.
When I was having a look at it and just looking at all the extra disclosure.
In the press release, but more so in the MD&A. There was a ton of pages really that we're there primarily because of this metric, which as I say.
It's very easy to calculate.
So that was kind of the primary reason for it it's a non industry standard metric. If you look at the competitive set how we wanted to find out I guess, we could debate, but there is no one really that uses those metrics. So really those two reasons, we're the number one.
The objective here is for us to to be simpler and the way we report.
Make it easier for everybody to understand what it is that we're doing and what we're focused on.
And not hiding about anything and as I say you can you can clearly take these numbers off the face of the financials.
Adjusted OCI for.
For this quarter was negative $19 four if you compare that to the prior year was negative 32, 9%.
As an improvement.
And as I say the interest in taxes number you can pull it off the face of the statements. So yes, I mean, it was long winded answer but bottom line is for us to just get more streamlined and simple and make it easier for everyone to understand what it is we're trying to do.
Okay.
Just one more detailed question here.
Commentary in the MD&A about some there's still there's still a customer.
Attrition can you just give.
A description of what's happening there.
Well this is just.
I'll, let me offer a comment or two Robinson.
And then we get the remnants of some small distillate business that.
As obviously.
Declining at a faster rate than.
The propane business and really is noncore to us and it's really a hangover.
From from a past life, if you will.
Noncore, we're managing it very very carefully obviously, but for us it's.
It's a business that.
We will see an extra two at some point and be opportunistic in terms of the journey from here to there.
And making sure we don't invest anymore in it but also maximize the value. So for us really it's a very very small part of the business but.
No great surprise, it's steady.
Steady decline.
Greg do you want to add anything to that I thought you said it well, it's yes businesses declined faster than.
Declines in the other so tariffs obviously is a great growth business I think the propane business tomorrow.
We will see what we can do with it but is that more of a flattish type business, but just all the businesses is a declining business as Alan said it.
It's a small percentage of the business momentum I represent Brian just I think around 10% or something less some of the U S business. So it is not not huge but.
Yes, that's what it is it's just a it's a different market Diana for that business. So obviously not an area of focus for us as we look forward.
Alright, so just secular decline in that specific product.
That's right that's right yes.
I was wondering okay.
You don't fight it because it's.
Yes.
It's market driven sorry go ahead.
Did you have other questions.
Final question for you all and I was wondering if you had any updates in terms of.
Your plans.
Mining incentives with Pierre.
Your targets and I'm thinking in terms of stock ownership requirements.
Any other.
Centers that might help you.
Just the line activities with the ultimate goal of bringing more out of existing assets.
Sorry, you are talking about.
Because of compensation.
Just yes, just tell you're aligning all the incentives across the organization, particularly.
<unk> ownership at the executive level.
Yes, okay, well a couple of updates there.
Kirsten joined US two weeks ago.
We've already kicked off a review of our executive compensation and the.
Generally speaking in terms of its competitiveness, but its alignment to the aspirations to drive significant shareholder value.
Bye.
Appreciation in the share price.
Which is not a simple thing that you talked about a high yield stock like ours that is our kind of liquidity and trading volume.
<unk>.
<unk>.
In the middle innings of that review.
Additionally, we've also.
Made a decision in the last couple of weeks.
So tariffs as a private company had a history of share ownership that was really deep.
And it was a point of pride, but also I think one of the Differentiators that made the teammates at terms, just so engaged and doing the right thing for the customers and for the company all the time.
Bringing that kind of a comp structure in a public company isn't easy.
<unk>.
It requires a lot of.
Sure.
Some.
Of adjustments in terms of how we think about comp but over the last few weeks. We've made the decision announced that internally that we're actually going to maintain.
Share ownership as part of incentive for the entire team at <unk> Terrace.
Is that was that was part of that program, which would be sort of the top two thirds of the organization and below.
So we're really committed to making sure that everybody that works at superior has every opportunity to be.
To be a participant in shareholder value creation as IRR number one and one could argue our only objective.
As long term shareholder value creation. These are the owners of the company and we need to deliver for them.
We want our employees to be to be part of that community, whether it's through share ownership programs or through share based incentives.
And we want our executives to be <unk> based on the success that they deliver for our shareholders. So.
We're really committed to this.
And at the operating level Youll see it at the executive level, but likely not until the management information circular next year.
Okay.
Does that answer your question, yes. It does thank you.
Okay. Thanks.
Thanks for the question a question.
Thank you and I'm showing no further questions at this time I'd like to hand, the call back over to Alan Macdonald for closing remarks.
Well, thanks, everyone look it's always a pleasure to talk to you all whether it be on this quarterly call or in our meetings in the intervening weeks I can't Thank you enough.
For your interest in the organization for your questions and for your feedback.
I want you to know that.
We've got thousands of people here at superior showing up to work every day really excited about the opportunities in front of us the team, it's a tariffs and the team at <unk>.
The propane division have been working really well together and we're excited about the future and.
We're just really really pleased to be able to tell the story. We think Q3 is a real turning point and successful one for us for a whole bunch of reasons operationally and strategically.
And we're looking forward to Q4 and speaking to you all again in February.
So thank you very very much.
This concludes today's conference call. Thank you for participating you may now disconnect.