Secure Energy Services Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
April 25, 2024

There are 10 speakers on the call.

Operator

Good afternoon, ladies and gentlemen, and welcome to Securin announces First Quarter 20 24 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. This call is being recorded on Thursday, April 25, 2024. I would now like to turn the conference over to Alison Prokop.

Operator

Please go ahead.

Speaker 1

Thank you. Welcome to Secura's conference call for the Q1 of 2024. Joining me on the call today is Rene Amuro, our Chief Executive Officer Alan Branch, our President Chad Meggis, our Chief Financial Officer and Corey Haim, our Chief Operating Officer. During the call today, we will make forward looking statements related to future performance and we will refer to certain financial measures and ratios that do not have any standardized meanings prescribed by GAAP and may not be comparable to similar financial measures or ratios disclosed by other companies. The forward looking statements reflect the current views of SECURE with respect to future events and are based on certain key expectations and assumptions considered reasonable by SECURE.

Speaker 1

Since forward looking information addresses future events and conditions, by their very nature, they involve inherent assumptions, risks and uncertainties, and actual results could differ materially from those anticipated due to numerous factors of risks. Please refer to our continuous disclosure documents available on SEDAR Plus as they identify risk factors applicable to SECURE, factors which may cause actual results to differ materially from any forward looking statements and identify and define our non GAAP measures. Today, we will review our financial and operational results for the Q1 of 2024 and our outlook for the remainder of the year. I will now turn the call over to Rene for his opening remarks.

Speaker 2

Thank you, and good afternoon, everyone. We are pleased to report a fantastic start to 2024 with Q1 results meeting our expectations, allowing us to narrow our adjusted EBITDA guidance to $450,000,000 to $465,000,000 for the year. Our strong financial performance continues to underscore the stability and growth potential of our waste management and energy infrastructure business. During the quarter, we are extremely pleased to close the 1 point $15,000,000,000 asset sale to an affiliate of Waste Connections. Proceeds from the sale transaction as well as continued strong free cash flow generation provides the corporation with significant capital allocation optionality for 2024 and beyond, facilitating our ability to execute on all of Secure's strategic priorities.

Speaker 2

With a solid foundation and clear direction, we're confident in our ability to protect the base business and seize new opportunities to create value for our shareholders. We also remain committed to enhance shareholder returns through our $0.40 per share annualized dividend and share repurchases all while maintaining low leverage. Over the past few months, we have materially strengthened our capital structure with debt repayment and financing. In February, we repaid the entire amount drawn on the $800,000,000 revolving credit facility and redeemed the senior second lien secured notes due 2025. In March, we closed the offering of the 6.75 year senior unsecured notes with an aggregate principal balance of 300,000,000 dollars Net proceeds from the offering along with cash on hand were used to redeem the outstanding principal amount of the 7.25 percent senior unsecured notes due 2026.

Speaker 2

At March 31, 'twenty four, the corporation had $264,000,000 of cash and unused debt capacity of approximately $750,000,000 dollars subject to covenant restrictions, providing ample liquidity for shareholder returns and funding of growth initiatives. During the quarter, we repurchased and canceled approximately 12,100,000 shares under the normal course issuer bid at a weighted average price per share of $10.47 for a total of $126,000,000 reducing our shares outstanding by 4%. The corporation repurchased an additional 2,800,000 shares subsequent to the quarter end. We also paid our quarterly dividend of $0.10 per common share, which is currently represents an attractive yield of 3.5% on our common shares compared to peers. And finally, today we announced an increase to our expected capital spend of $24,000,000 to $75,000,000 up from the $50,000,000 previously announced.

Speaker 2

The increase relates to customer agreements for a produced water pipeline to a waste processing facility as well as processing equipment for Phase 3 at the Clearwater heavy oil terminal. We continue to have a solid pipeline of organic growth opportunities and we'll consider acquisitions that meet its investment criteria and enhance its core operations in waste management and energy infrastructure. I believe this is only the beginning for Secure. We are well positioned with the right people, the asset network and financial flexibility to take us on our next phase of growth. As previously announced, I will retire as CEO on May 1, 2024.

Speaker 2

The leadership transition with Alan Grant, assuming the role of President and CEO marks the beginning of an exciting new chapter for the corporation. I'm proud of what we have accomplished together and even more excited about our future. Alan's proven leadership capabilities, extensive experience and diverse skill set will allow for a seamless succession and guide Secure as it moves forward. I look forward to continue to support Secure's strategy as Vice Chair of the Board. I'll now pass it over to Chad to provide some additional Q1 highlights.

Speaker 2

Thanks, Rene, and good afternoon, everyone.

Speaker 3

Strong execution across all business units continues to underscore the stability of our cash flow generation capabilities. As a sale transaction with Waste Connections decreased number of our overall facilities, this reduced most of our financial metrics on an absolute basis when comparing the Q1 of 2024 to a year earlier. However, thanks to our opportunistic share buybacks over the past year, we have decreased our weighted average outstanding shares in the Q1 of 2024 compared to the Q1 of 2023 by 8%, partially offsetting the impact of the reduced number of facilities to our results on a per share basis. To be clear, we have not prepared any financial highlights on a pro form a basis. Corey, however, will provide some volume information on a pro form a basis.

Speaker 3

Net revenue of $360,000,000 decreased 13 divestiture of 2 non core oilfield service business units in divestiture of 2 non core oilfield service business units in 2023, partially offset by higher volumes and improved margins across corporations remaining infrastructure network. Net income of $422,000,000 or $1.50 per basic share increased $367,000,000 or $1.32 per basic share compared to the Q1 of 2023. The increase was primarily driven by the $520,000,000 gain recognized on the sales transaction, net of the current and deferred tax expenses resulting from the gain. Adjusted EBITDA of $132,000,000 or $0.47 per basic share decreased 13% from the Q1 of 2023 or 4% on a per basic share basis as a result of the sale transaction. Funds flow from operations of $108,000,000 or $0.38 per basic share decreased 21% from the Q1 of 2023 or 14% on a per basic share basis as a result lower operating profit resulting from the sale transaction.

Speaker 3

Discretionary free cash flow of $93,000,000 or $0.33 per basic share decreased 24% from the Q1 of 20 23 or 18% on a per basic share basis. The lower adjusted EBITDA was partially offset by reduced spending on sustaining capital due to the reduced facility count following the sale transaction. As the sale transaction utilizes significant amount of secures tax pools, the corporation is reporting current tax expense in 2024, the majority of which is expected to be actually paid in the first half of twenty twenty five. I'll now turn it over to Corey to provide some operational highlights from the Q1.

Speaker 4

Thanks Chad. In the quarter, our facilities handled on average, 142,000 barrels of produced water per day and 51,000 barrels of slurry waste and emulsion. Through our processes, we were able to recover over 315,000 barrels of oil from customer waste. On a pro form a basis, produced water volumes were up 11% from the Q1 of 2023. The increase was a result of higher same store volumes due to industry trends resulting in increased water volumes.

Speaker 4

On a pro form a basis, waste processing volumes were up 3% from the Q1 of 2023 due to production growth as well as increased drilling and completion activity driving incremental volumes in certain regions. Across our landfill network, we safely disposed 940,000 tonnes of contaminated solid waste in the quarter. On a pro form a basis, landfill volumes were relatively flat quarter over quarter supported by disciplined drilling and completion activity and mandatory abandonment remediation and reclamation spending. Overall, ferrous metal recycling volumes increased 48% due in part to incremental scrap volumes associated with project work driving higher volumes to secure its facilities as well as strategic investments made in 2023 and process improvements which resulted in improved operating capabilities and efficiencies. In our Energy Infrastructure segment, crude oil and condensate terminalling and pipeline volumes were up to 115,000 barrels per day in the Q1, a 23% increase from the same period in 2023 driven by the Clearwater heavy oil terminal, which commenced operations in the Q4 of 2023.

Speaker 4

Turning now to our capital program. Our $75,000,000 growth capital plan for 2024 relates primarily to brownfield infrastructure expansion projects to manage incremental production volumes for our customers. Major growth projects are backstopped by new commercial agreements providing reliable volumes and recurring cash flows over the life of the contract. In the Q1, we incurred $11,000,000 as we progressed our investment in the second phase of the Clearwater terminal and spent some additional capital at our metal recycling location. The Clearwater terminal expansion is backstopped by both existing and new customers and will approximately double the terminal capacity to over 60,000 barrels per day.

Speaker 4

Construction activities are expected to be completed and the expanded capacity operational in the Q2 of 2024. We also closed a small acquisition in our specialty chemicals business during the quarter, expanding our product offerings for fluid optimization within the water treatment production, remediation and drilling fluid chemical segments. Sustaining capital of $8,000,000 for the quarter related to landfill cell expansions, well maintenance and asset integrity programs for processing facilities and asset replacements for our waste management operations. We continue to expect to spend approximately $60,000,000 on sustaining capital in 2024 and approximately $15,000,000 on settling secures abandonment retirement obligation. I will now turn it over to Alan.

Speaker 5

Thanks, Corey. Secure is looking forward to releasing our 5th annual comprehensive sustainability report and our 2nd task force on climate related financial disclosures report in May, demonstrating our ongoing commitment to transparent reporting. These reports showcase the advancement we made in our ESG priorities in 2023. We are especially proud of substantial progress secure made in reducing our emission intensity as we've experienced a decrease of nearly 13% on our overall emissions intensity from 2021 to 2023. We are on track to reach our short term goal of 15% reduction over 3 years in our greenhouse gas emission intensity by the end of 2024.

Speaker 5

We introduced new technologies to ensure compliance and standardization of waste and recyclable documentation. We also continued to deliver on our commitment to supporting the communities where we live and work through more than $1,300,000 in contributions. The solutions secure provides are designed not only to help reduce costs, but also lower emissions, increase safety, manage water, recycle 5 products and protect the environment. In 2023, we avoided 28,000 tonnes of CO2 by recovering crude oil from waste when compared to producing the same barrel from extraction of virgin resources. And similarly, by processing scrap metal for recycling, we avoided 94,000 tons of CO2 when compared to creating the same ton of metal from resource extraction.

Speaker 5

Combined, this is enough to offset all our Scope 1 emissions in 2023. Additionally, we displaced 140,000 truckloads because of our pipeline infrastructure network resulting in 13,000 tons of CO2 reduction of our customer scope 3 emissions. The company's success is a testament to the hard work and dedication of everyone on the secure team. As we look at 2024, some of our key objectives include progressing on our journey to net 0 with ambitious safety targets, fostering our indigenous partnerships with the completion of our progressive Aboriginal Relations Program certification and working to develop a protocol for carbon credits generated from recovery of products from waste, which will be a critical milestone in achieving our net zero by 2020 by 2,050. Turning now to the outlook for the remainder of the year.

Speaker 5

Secure is extremely well positioned for success with a strong industry backdrop, growth opportunities and the financial capacity to execute on our strategic initiatives and deliver enhanced shareholder returns. With the Trans Mountain pipeline expansion scheduled to begin operations in the Q2, our customers can gain takeaway capacity and stronger pricing with access to global markets paving the way for sustained and expanded activity levels in years ahead. We expect industry fundamentals will drive increased volume and overall demand for Secure's infrastructure. With our waste processing facilities currently operating at 60% utilization, we have ample capacity to accommodate growing customer needs for processing, disposal, recycling, recovery and terminalling, all with minimal incremental fixed costs or additional capital investment. Over the last quarter, the corporation successfully refinanced its long term debt and continued to deliver shareholder returns through dividends and share buybacks, while maintaining significant financial flexibility.

Speaker 5

Given our positive operational results in the Q1, the Board of Directors and management continue to believe the significant gap exists between Secure's current market valuation and that of the peers in the waste management and energy infrastructure sector. In light of these factors alongside ongoing initiatives, we intend to initiate a substantial issuer bid next week as a key element of Securus' capital allocation strategy. I also invite you all to attend tomorrow's Annual General Meeting of Shareholders. At this meeting, among other things, shareholders will be voting on SECURE's Board of Directors. I am pleased to be on the ballot for the first time with 7 other highly qualified and experienced directors.

Speaker 5

Brad Monroe, long time Director of Secure will not be seeking reelection at the meeting and we offer him a sincere thank you for 15 years of valuable service. Lastly, I want to wish Renny congratulation on his well deserved retirement from management. Thanks to Renny's visionary leadership, Securus established itself as a trusted industry partner, showcasing remarkable accomplishments in growth and operational excellence. The corporation is extremely well positioned to advance our strategy as a leader in waste management and energy infrastructure, prioritizing value creation for our customers through reliable, safe and environmentally responsible infrastructure. I am very privileged to be taking over as CEO at this time and I'm excited for this opportunity for continued growth and innovation.

Speaker 5

I look forward to Renny's continued support as Vice Chair of the Board of Directors and working with him and the entire Board to help guide Secure into the future. That concludes our prepared remarks. We would now be happy to take your questions.

Operator

Thank First question comes from Cole Perera at Stifel. Please go ahead.

Speaker 6

Hi, afternoon all. I just wanted to start on the SIB. Obviously, there's some questions around what the size and price may be. Can you just talk about how you're thinking about what the right level might be for most of these factors, whether it's a a certain valuation multiple, a certain leverage that you want to be at after? How are you guys thinking about that?

Speaker 2

Hi, Colt, it's Rene here. I'm sure that's going to be the number one theme until we press release our intentions. And those are great questions around the SIB. All we can tell you is that next week, we'll get that all figured out and take a look at a bunch of different factors that go into the various criteria and ultimately get signed off by our Board of Directors. But stay tuned.

Speaker 2

We'll press release it once we get it all together and it should happen next week. That's our intent.

Speaker 6

Got it. Fair enough. And then so obviously you're effectively debt free now. The business is generating a lot of free cash. How do you guys think about what the right level of growth spending is for this business going forward?

Speaker 5

Hey, Cole, it's Alan here. Yes, no, great question. If you look at 2023, we spent over $100,000,000 in growth projects, primarily in the Montney for water disposal infrastructure and then our Nipissie terminal, which is great economics and great growth projects. And a lot of our projects are a result of our customers wanting to work with us to partner up to get there, whether or not it's waste products into our waste processing facilities or whether they want clean oil onto a mainline system, we're there to help them. And I think as we think about growth here for 2024, we just announced another $25,000,000 and part of that is we're going to complete Phase 2 for Niplicity and we're going to add Phase 3, which will add some processing capacity, some treating capacity to get a total terminal output of around 70,000 barrels a day.

Speaker 5

That will be complete by the end of this year. So great growth project. We also announced that we're doing another Montney water disposal pipeline that's backed by an anchor tenant. And these are all very similar sort of take or pay and area dedication arrangements that we have with our customers. And as I said in the past, we'll come to announcing these projects when we've got signed agreements.

Speaker 5

And when we do that, we'll roll out the project and what it relates to. We've been focusing a lot on brownfield growth expansion. Those are great return projects because you have your base infrastructure and the more infrastructure you add, the higher rate of return. So my expectation here, I think we spent $100,000,000 last year. I could see that number, the $75,000,000 that we've announced so far trending upwards to $100,000,000 But again, that will be predicated on when we get agreement signed.

Speaker 5

Some of it might roll into 2025. But ultimately, I'd say our hopper of opportunity is pretty robust. And when you have a strong backdrop in the sector like we're seeing, more opportunities start to present themselves. And so as those opportunities are vetted and we see where that infrastructure is added, again, we'll come to market.

Speaker 6

Okay, got it. And then just one more quick one. Chad, you mentioned you'll be cash taxable in 2025. Any bookends you're willing to put around this in terms of a dollar amount, percentage rate, something like that?

Speaker 3

Yes. Hey, Cole. I think the best thing to do is our year end note, we'll have a taxable income and then I would knock that down for the divestiture and the percent or rough percentage of what the cash flow we lost for the divestiture and then just apply that 25% rate. But given you ballpark dollar numbers that's in the on a go forward basis, it's probably in the $60,000,000 to $75,000,000 range.

Speaker 6

Okay, got it. That's all for me. Thanks. I'll turn it back and congrats again, Rene on your retirement.

Speaker 4

Thanks, Cole.

Operator

Thank you. Next question comes from John Gibson of BMO Capital Markets. Please go ahead.

Speaker 7

Good afternoon. And again, congrats on Aon here. You're stronger at Secure and Best wishes in your retirement.

Speaker 4

Just one thing that's kind

Speaker 7

of gone under the radar is your dividend. I guess when the dust settles on the SIB, could we expect a similar payout level for the dividend? Just obviously this would imply an increase just given where your share count falls to?

Speaker 5

Hey, John, it's Alan here. Yes, no, I think obviously in our capital allocation decision making share buybacks are really paramount. I mean if you look at what we've done in the Q1, we bought back over 12,000,000,000 shares. We've used about 70% of that NCIB because we continue to believe the stock is undervalued and it's a real value when you see what we transacted and sold in a distressed situation to Waste Connections. So that's a real discount.

Speaker 5

And so we've been taking advantage of it. And that's why next week when we come out and put out terms on the SIB, you'll get an understanding of what that looks like. But as I go through the other elements of capital allocation in terms of growth, which we've now announced and is a little bit of parameters around it. Our balance sheet is in fantastic shape. The deal that Chad restructured in March, I think sets us up well for the future here.

Speaker 5

So I do believe as the dust settles here and we get through Q2, we will take another look at the dividend and our current yield because you're right, as we buy back stock, there will be contemplation. Do we are we getting the value for the dividend and what do we want to do? Do we want to increase it? But that will be our optionality and I think we will take a look at as we progress through the year. Okay, great.

Speaker 7

And then last one for me. Thanks for providing the pro form a metrics or volume metrics on the call and obviously impressive to see the year over year increases. Could you maybe speak to what the drivers were more specifically? Was it more production volume related or more due to the infrastructure you've built over the past few years?

Speaker 5

I think it's really it's Corey here. I think it's

Speaker 4

a combination of both. We saw steady activity through the quarter on drilling completions and production. So when you combine all those three together, you get those results of produced water being up 11% quarter over quarter, our waste processing volumes up 3% quarter over quarter. We've been very successful on the metal recycling project work which has increased our 40% quarter over quarter. So I think it's just a little bit of everything and great execution by our team.

Speaker 4

And

Speaker 5

So we've announced so down here, we've announced that the $75,000,000 most of that capital will likely be spent throughout, call it Q3 and Q4, a little bit here in Q2. So the expectation is the contribution of EBITDA from that $10,000,000 above the numbers here in Q1, we've tightened our guidance range to $450,000,000 to $465,000,000 of EBITDA for 2024. So any of the organic spend and then contribution will be 2025.

Speaker 7

Okay, great. Appreciate the color. I'll turn it back.

Speaker 4

Thanks, John.

Operator

Thank you. The next question comes from Keith Mackey at RBC. Please go ahead.

Speaker 8

Hey, good afternoon. Just wanted to start out on the TMX expansion. So pipeline hopefully be coming towards the commissioning very shortly here. Can you just talk about your exposure to whether it's direct exposure or not to the improved operating environment with this pipeline in effect. You certainly got some ability to store crude and looks like did some in Q1.

Speaker 8

Can you just talk about your revenue opportunity and the overall business environment pre and post the TMX expansion commissioning?

Speaker 2

Sure. Yes, you're absolutely right there. We've always said that we'll optimize differentials and obviously help out our customers to get the best net price and obviously having the ability to store some crude in select months enhances both the customers' net price and our bottom line. Think of TMX as coming on. You've got a lot of our customers who have indicated to us and shared some of those long term forecasts, obviously, when it comes to making sure they have the right infrastructure is that I think you'll be a little bit more aggressive in terms of bringing on new production because let's face it since 2,008, we've been pipeline constrained.

Speaker 2

And so kind of opens the door for a lot of the volumes that maybe wouldn't have been as aggressively drilled to obviously be drilled and new production come on. So what we're seeing in that Western Canadian Basin is there's a lot of new startups. There's a lot of smaller companies that go under the radar. They're private a lot of the times who have a lot of land holdings and are starting to drill up with some of the new drilling techniques. And traditionally some of these areas, just weren't economical at that $70 to $75 now with the new drilling techniques, you're seeing them getting a 6 month payback, 3 month payback.

Speaker 2

And that just opens up a whole new door in terms of bringing new production and new waste and new water into our facilities. And the great thing about our network is that we've got pretty well most of Western Canada covered where this drilling, this new drilling is happening in

Speaker 4

the new

Speaker 2

production incremental production is coming on. So I think what you'll see Keith over the next 3 years is I think you're not going to see a whole bunch of apportionment. And maybe there's a little less of the volatility and differentials, but you also have a customer base that wants to take advantage of that higher netback and actually bring on new production. So all in all, we just think it's really positive for not only secure, but for our customers.

Speaker 8

Got it. No, that's very helpful. Thanks for that. And just secondly on acquisitions. So you've talked about potentially doing acquisitions, but sticking with your core competencies and things like that and strict return targets.

Speaker 8

But can you talk a little bit about your readiness to be able to execute on anything you need? Is there any particular new capabilities you'd have to stand up to be able to evaluate potential deals and things like that? Or is that pretty much all ready to go and now it's just a matter of finding the right deals that meet your criteria?

Speaker 5

Yes, Keith. I think we spent so much time in 2022 realizing the synergies. They were such low hanging fruit. And then I would call it in 20 23, we played defense because we were not only going to battle against the competition barrel, but we were also all hands on deck to try to get as much value as we can for these infrastructure assets, which ultimately very successful considering the distressed situation. So I now have a team in my business development and M and A group that are really ready to go on to the next chapter, which is you got a great balance sheet and there's lots of good acquisitions.

Speaker 5

I just don't think we've had enough time considering we just closed Feb 1 and there was lots of things that needed to happen to make sure that was successful. So

Speaker 4

we're just

Speaker 5

now starting to get into what type of opportunities within our own core competencies make a lot of sense for us to transact on. I would think we have the current bench strength to go ahead and start betting through acquisitions. A lot of them are what early days, call it tuck in acquisitions that kind of fit where the business is growing in terms of that waste management space. But I think as we get through 2024, we'll provide more clarity about what that looks like. But right now, it's really early days and we're obviously focused on the capital allocation priorities here of just buying back our stock because that's the best return for our shareholders right

Speaker 8

now. Okay, perfect. Thanks very much. And of course, Rene, echo all retirement. Thanks very much.

Speaker 8

Have a

Speaker 9

good day, guys.

Speaker 2

Thanks, Keith. I'm trying to go from 8000 to 7000 RPMs.

Speaker 8

Awesome. Take care.

Speaker 5

Thanks.

Operator

Thank you. The question comes from Patrick Kenny at National

Speaker 1

Bank.

Speaker 9

Good afternoon, guys. Thank you. Just on the EBITDA margins, so 37% realized in the quarter. Can you remind us within your financial guidance for the year, if you're expecting any material change in margins going forward? I mean, it sounds like higher customer activity with TMX coming on offsetting any headwinds potentially related to tighter differentials.

Speaker 9

But I'm just curious with your new high quality take or pay assets coming on this year as well, how we should be thinking about your consolidated EBITDA margins trending over the next year or 2?

Speaker 3

Yes. Hey, Pat, it's Chad. Good question. We're very happy with our EBITDA margins 37%. We do think, as we go forward that the trend will be more in that mid-thirty percent range, so around 35%.

Speaker 3

And obviously, we'll do what we can to obviously increase that. But I think that's over the longer term that's what we're modeling today and that's what we're seeing and that's what we're managing to.

Speaker 9

Okay. Got it. Thanks. And then maybe just a higher level curious,

Speaker 2

if you could provide a bit

Speaker 9

of an update on your overall strategy with respect to the metals recycling business. It looked to be a nice tailwind here in the quarter. But just perhaps your outlook for ferrous pricing and overall demand for recycling services and perhaps a bit of a look into what regions across North America that you might be interested in extending your metals franchise?

Speaker 5

Yes. Hey, Pat. Yes, I think we've done a very, very successful job at getting the operational aspect of that business turning inventory on a monthly basis. We've upgraded some of the equipment purchases within our facility network. So we purchased 40 railcars last year.

Speaker 5

We've got another 40 here on the table here for 2024 because a lot of the, let's call it CP and CN aren't leasing cars anymore. So actually to have the railcars and these railcars can hold 30 percent more. They're deeper and they're a little bit wider that allows you to actually ship more efficiently. So there's some operational efficiencies that we're going to get from these new cars. So we have that as an advantage.

Speaker 5

I know there's a bit of a trend from a decarbonization in how metal is actually creating on the fair spaces. So a lot of the refiners are moving from these blast furnaces to arc furnaces and arc furnace is just require recycled material. And so we believe the long term outlook for metals is very strong. I think the demand for recycled material when refiners are only able to use that recycled material, I think will help create demand for that market in the long term. And so I think what we've done to set up the business is fantastic.

Speaker 5

We had some of the benefits of TMX and volume throughput through the facilities. We also work up in Fort Mac and help some of our customers there manage some of the tailings pipe. So we've got a steady state volume that we see. And given the demand and the backdrop, I think that you can envision a scenario where metal pricing remains relatively robust here. So I think that business is set up for success in the long term.

Speaker 9

And too early to say what, I guess percentage of your overall business mix might come from the metals recycling business over time?

Speaker 5

Yes, I think it's too early. I mean, we've got pro formas all over the place that we just divested some facilities. Chad is running models all over the place. So I think give us a little bit of time for that one and we'll we can provide as much clarity as we can on what that looks like in an overall waste management segment of the business.

Speaker 9

Okay, great. Sounds good. And thanks to both of you again on your retirement, Rene and your appointment, Alan. Thanks.

Speaker 4

Thank you. Thanks, Matt.

Operator

Thank you. We have no further questions. I will turn the call back over to Alan Grech for closing comments.

Speaker 5

Thank you for being on the conference call today. A taped broadcast of the call will be available on Secure's website. We look forward to providing you with updates on Secure's performance at the end of July after the completion of our Q2.

Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you please disconnect your lines.

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