This article first appeared on GuruFocus .
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Adjusted EBITDA (Tidewater Renewables):Record $56 million in Q2 2026.
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Adjusted EBITDA (Tidewater Midstream):$32.9 million in Q2 2026, up $7.3 million from Q1 2026.
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Adjusted EBITDA (Consolidated):Record $88.9 million in Q2 2026, up $39.2 million from Q1 2026.
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HDRD Complex Throughput:Record average daily throughput of 3,315 barrels per day, representing a 111% utilization rate.
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Prince George Refinery Throughput:Averaged 10,032 barrels per day in Q2 2026; excluding a planned 17-day outage, averaged 12,060 barrels per day (101% of design capacity).
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Prince George Crack Spread:Averaged $118 per barrel in Q2 2026, a 16% increase from Q1 2026.
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BRC Gas Processing Throughput:Averaged 105 million cubic feet per day in Q2 2026, an 80% decrease from the previous quarter.
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Biofuels Production Incentive:$7.7 million of expected proceeds recognized in Q2 2026; total cash contributions of $13.8 million expected for Q1 and Q2 2026.
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Equity Investment (Cattle Company):Contributed $7.7 million to adjusted EBITDA in Q2 2026.
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Net Debt Reduction (Consolidated):Decreased by $44.4 million in Q2 2026 ($30.9 million at Tidewater Midstream and $13.5 million at Tidewater Renewables).
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Debt to Adjusted EBITDA Ratio:1.47 times at Tidewater Renewables, 2.3 times at Tidewater Midstream, and 1.7 times on a consolidated basis as of June 30, 2026.
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2026 Adjusted EBITDA Guidance:Increased to $230 million-$250 million (consolidated), $130 million-$140 million (Tidewater Renewables), and $100 million-$110 million (Tidewater Midstream).
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2026 Capital Expenditures Guidance:Unchanged at $2 million-$3 million for Tidewater Renewables and $20 million-$25 million for Tidewater consolidated.
Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record HDRD complex throughput of 3,315 barrels per day, achieving 111% utilization rate.
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Record adjusted EBITDA of $56 million in Q2 2026, driven by strong margins and the biofuels production incentive.
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Executed contribution agreement for the Biofuel Production Incentive Program, securing $13.8 million in cash contributions for Q1 and Q2 2026.
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Significant debt reduction, with consolidated net debt down $44.4 million and leverage ratios back within target range.
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Increased full-year 2026 adjusted EBITDA guidance to $230-$250 million, reflecting improved market conditions and facility performance.
Negative Points
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Planned 17-day outage at the Prince George Refinery reduced throughput to 10,032 barrels per day in Q2.
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BRC gas processing throughput decreased 80% quarter-over-quarter due to NGTL curtailments.
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Ram River Gas Plant remains temporarily curtailed, limiting production and revenue.
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Realized losses on crack spread hedges partially offset stronger refining margins.
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SAF project FID still pending regulatory clarity, with capital costs estimated at $1.2 billion.
Q & A Highlights
Q: Can you update us on key milestones for the SAF project as we look toward a potential Q4 sanctioning, including sizing, cost, and potential in-service date? A: Jeremy Baines (CEO): We need the regulatory environment to support the project, specifically the targeted amendments from ECCC around the Clean Fuel Regulations and how they treat SAF, which we expect in the third quarter. With those in place, we would FID the project later this year. The capital cost is approximately $1.2 billion based on a detailed Class III FEED.
Q: With net debt to EBITDA now back in target ranges, is there still a need to pursue non-core asset sales, and how do you plan to fund initiatives like the SAF project? A: Jeremy Baines (CEO): We will continue to pursue non-core asset sales as part of our strategy to divest assets that don't generate appropriate returns. For the SAF project, we expect to receive the same level of government support as we did for the HDRD plant. We believe we can fund the three-year build out of the $1.2 billion project through cash flow from operations, though we also have alternatives like a potential equity stake from a First Nations partner and other interested parties.
Q: Can you update us on how you're thinking about the appropriate level of hedging for Tidewater, given you have 50% hedged for 2026 and 40% for 2027? A: Jeremy Baines (CEO): We wanted to put a baseline of cash flow under the business for the year to ensure we met our debt reduction goals, which led to the 50% hedge program in 2026. We like where forward cracks are for 2027, so we've started layering in hedges there. We could opportunistically go above 50% at certain points, but 50% seems to be the right spot to take some volatility out of revenues.
Q: You mentioned a three-year build for SAF that you can fund out of operating cash flows. Does that mean you don't necessarily need other funding partners, but you welcome collaboration? A: Jeremy Baines (CEO): We are working with a potential First Nations partner and would like them to join the project if they choose to invest. Otherwise, we believe through Part III agreements and cash flow from operations, we have the ability to fund the entire SAF project on our own. It's a three-year build-out, online in 2030, and will have a meaningful impact on our cash flows at that time.
Q: Can you reset our views on why the current corporate structure of Tidewater Renewables and Tidewater Midstream is still the right construct today, and what variables could change for you to reconsider the structure? A: Jeremy Baines (CEO): We see the business as a fuel business and a midstream business. We continue to see constructive environments around both streams: a supportive regulatory environment for renewable fuels, global events supportive of conventional fuels refining, and continued development of Western Canadian resources supporting midstream demand. We have generated significant efficiencies operating the two companies and continue to work to optimize the businesses and generate cash flow for all shareholders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
