Secure Waste Infr Q1 2026 Earnings Call Transcript

Secure Waste Infr (TSX:SES) reported first-quarter financial results on Thursday. The transcript from the company's first-quarter earnings call has been provided below. This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation. The full earnings call is available at https://app.webinar.net/Z2prKwqGmen Summary SES AI Corp reported a strong financial performance with an adjusted EBITDA of $137 million, reflecting a 13% year-over-year increase, and a revenue of $383 million, resulting in a 36% margin. The company announced a strategic transaction with GFL Environmental, emphasizing immediate value to shareholders and potential future upside through equity ownership in the combined company. SES AI Corp raised its 2026 adjusted EBITDA guidance and increased growth capital expenditure to $100 million to support high-return infrastructure projects. Operational highlights included the commissioning of produce water infrastructure in the Montney and progressing the reopening of a waste processing facility in Alberta. Management emphasized the stability of cash flows driven by long-cycle drivers and steady volumes, with a focus on disciplined pricing and cost control. Full Transcript OPERATOR Good morning ladies and gentlemen and welcome to the SecureWaste Infrastructure Corp. Q1 2026 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during the call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, April 30, 2026. I would now like to turn the conference over to Chad Mangus. Please go ahead. Chad Mangus (Chief Financial Officer) Thank you and good morning to everyone who is listening to the call. Welcome to Secure Waste Infrastructure Corp's conference call to discuss our first quarter 2026 results. I'm Chad Mangus, Chief Financial Officer and joining me on the call today are Alan Granch, our President and Chief Executive Officer, and Corey Hyam, our Chief Operating Officer. During the call we will make forward looking statements related to future performance and refer to certain non GAAP financial measures that do not have standardized meanings under IFRS and may not be comparable to similar measures disclosed by other companies. Forward looking statements reflect management's current expectations and are based on assumptions that we believe are reasonable. However, actual results may differ materially due to a number of risks and uncertainties. Please refer to our disclosure documents available on SEDAR for further details of these risks and for definitions and reconciliations of non GAAP measures. Today we will focus on three areas the GFL transaction and shareholder meeting, an overview of Q1 performance and key financial highlights, and an outlook for the remainder of 2026 and beyond. I will now turn the call over to Alan. Alan Granch (President and Chief Executive Officer) Thanks, Chad. Good morning and thank you for joining the call today. I'd like to start with our recently announced transaction with GFL Environmental and the materials filed this week in connection with the upcoming shareholder meeting. This transaction delivers immediate and certain value to shareholders at an attractive valuation, including a meaningful premium to our recent trading levels, while also providing continued participation in future upside through equity ownership in the combined company. The Board unanimously recommends that shareholders vote in favor of the transaction following a comprehensive review of strategic alternatives. In making this recommendation, the Board considered the opportunity to crystallize the value created at Secure, the ability to participate in future value creation through GFL equity, alignment with a proven entrepreneurial management team as well as limited number of alternative transactions available and the relative risk adjusted value of continuing as a standalone business. The Board also considered that GFL shares are currently trading below historical levels and in its view do not fully reflect the underlying value of the business, providing a potential for future re-rating over time. Over the past several years, Secure has built a high quality infrastructure backed waste platform with strong fundamentals and a clear path to continue growth. However, realizing that value on a standalone basis requires ongoing execution and capital deployment. This transaction enables shareholders to crystallize that value today and reduces execution risk and preserves meaningful upside through the combined platform. None of this would be possible without our people. Over 2000 employees have built secure into what it is today, grounded in a culture of safety, operational excellence and doing the right thing. These values are strongly aligned with GFL and our team will play a critical role in the combined company going forward. We encourage all shareholders to review the materials and vote in favor of the transaction on May 27. Turning briefly to the quarter, we delivered a strong start to 2026, generating $137 million of adjusted EBITDA, up 13% year over year and 21% per share. This performance reflects continued strength across volumes, pricing, capital projects and acquisitions despite lower oil prices for the majority of the quarter prior to the recent strengthening in commodity prices. Operationally, we continue to advance our growth projects including commissioning our produced water infrastructure in the Montney and progressing the reopening of suspended industrial waste processing facility in Alberta's industrial heartland, which remains on track for completion by the end of the second quarter. Overall, the quarter reinforces what we consistently see in our business stable volumes, disciplined pricing and incremental growth from capital deployment. We now expect results to trend toward the high end of our 2026 adjusted EBITDA guidance range and we are increasing our growth capital to approximately 100 million from 75 million to support the acceleration of high return infrastructure projects. I'll now turn the call over to Chad. Chad Mangus (Chief Financial Officer) Thanks Alan. In the first quarter we generated 137 million of adjusted EBITDA on 383 million of revenue, resulting in a margin of 36%. While revenue growth was modest, EBITDA growth was stronger reflecting a continued shift toward higher margin waste streams, disciplined pricing and cost control. This is consistent with our strategy of prioritizing quality of earnings over top line growth. We also generated 101 million of funds flow from operations in the quarter, supporting both our capital program and returns to shareholders on the balance sheet. Let me walk through a few more items in more detail than usual. We reported restricted cash of 31 million reflecting margin posted on hedging positions. This was driven by the sharp move in oil prices during March which created temporary margin requirements. These positions were fully offset by physical positions that have either been or are expected to be realized at a higher price. We also reported a higher than normal cash balance of 59 million reflecting the large payment received on the last day of the quarter. As of today, a revolver balance has been paid down by 76 million since end of Q1 to approximately 350 million. From a capital allocation perspective, we continue to execute on our priorities. During the quarter, we increased the dividend by 5% to 10 and a half cents per share paid quarterly, we repurchased nearly 1 million shares at a weighted average price of just over $17. And we continue to invest in high return projects, spending 22 million to advance previously announced plans. Our priorities remain unchanged. Invest in the business, maintain a strong balance sheet and return capital to shareholders. I'll turn the call over to Corey now to discuss the business outlook for the remainder of 2026 and beyond. Corey Hyam (Chief Operating Officer) Thanks, Chad. To start, I want to provide an overview of the underlying cash flow profile of the business. One of Secure's key strengths is that our cash flow is generally not tied to short term commodity prices. Our business is driven by ongoing production, industrial demand and mandated environmental spending. These are long cycle drivers resulting in stable volumes and predictable cash flow across cycles. What we typically see is limited near term upside when prices rise and moderated downside when prices fall. That stability under pins our performance now, tying that to our outlook. The move toward the high end of our guidance range primarily reflects oil prices that are approximately 20% stronger than our original assumptions. That said, given our limited direct exposure to commodity prices, the impact to our business remains modest and confined within a relatively narrow range. Importantly, this is not what is driving the underlying growth of the business. The year over year increase relative to 2025 is being driven by the same factors that have consistently underpinned our first, the strength and resilience of our base business supported by steady volumes and disciplined pricing. Second, the full contribution from infrastructure projects and acquisitions commissioned through 2025 and early 2026, which are now contributing incremental EBITDA and third, improved performance of metals recycling supported by higher volumes, better pricing and the logistics improvements we made last year. So when you step back, the move within the guidance range reflects macro tailwinds with the growth of the business itself or while the growth of the business itself continues to be driven by execution, capital deployment and the strength of our underlying platform. Looking longer term, the fundamentals remain strong. Western Canadian production is expected to grow approximately 3% annually through 2030, supported by improved market access through TMX and LNG developments, resilient producer economics and a continued focus on efficient long life resource development. Additionally, increasing reclamation and remediation requirements are driving non discretionary demand for our infrastructure. Produced water volumes are also increasingly increasing with higher intensity development and as water handling becomes more complex and capital intensive, we continue to see a structural shift towards outsourcing. When you combine these factors, it creates a long duration, highly visible demand profile for our business. I'll now turn it over to Alan to conclude our prepared remarks. Alan Granch (President and Chief Executive Officer) Thanks Corey. To close Secure continues to deliver stable recurring earnings, strong free cash flow and visible long term growth core attributes that underpin the intrinsic value of our business. The transaction with GFL captures that value today, reduces the risks associated with realizing it independently, and positions shareholders to participate in the next phase of growth through a larger, more scaled platform. The transaction has the full support of our board, including a special committee of independent directors. Alan Granch (President and Chief Executive Officer) Additionally, certain of our largest shareholders, together with our directors and executive officers, have entered into voting support agreements representing approximately 21% of our outstanding shares. We encourage all shareholders to review the materials and vote in favor of the upcoming meeting. I also want to recognize our employees for their continued commitment, their focus on safety and execution as what built this business and we continue to drive success going forward. Alan Granch (President and Chief Executive Officer) With that, we'll open the line for questions. OPERATOR Thank you ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press the star followed by the one. On your touchtone phone you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Konark Gupta with Scotiabank. Please go ahead. Konark Gupta (Equity Analyst) Thanks. Good morning team. I think maybe the first one on the volume side, it seems like you guys have changed the disclosures around volumes. So just trying to understand, you know, the volumes seem to be up on the liquid side on the waste segment and maybe down a little bit on the solid waste side, which I think includes now the scrap metal. If you can help us parse out the key underlying drivers in these volumes. I mean I think seems like produced water seems still more positive than other commodities. Konark Gupta (Equity Analyst) But what were the sort of puts and takes in the quarter on different commodities? Thanks. Corey Hyam (Chief Operating Officer) Good morning Konark, It's Corey. Yeah, I think, I think you kind of nailed it there in terms of the macro pieces. You know, it's kind of the same themes as we exited Q3 and Q4 where, you know, activity was a little softer in the field. But you know, I think Q1 showed stability in Our liquids volumes, which it was driven by the produced water volumes. As you mentioned, when you look at the solids processing side, we had outperformance in our metals group which offset some of the softness in the landfill volumes. Corey Hyam (Chief Operating Officer) So you know, when I look at this, it just, it really just emphasizes the performance and the stability in those two solids and liquids processing pieces of our business. Alan Granch (President and Chief Executive Officer) I think to add here, Konark. I think too as we think about the activity levels here in 2026 and obviously we just raised our guidance to the upper end of that range. You know, we were, we were looking at a $65 WTI year where I think our expectation were volumes were going to be relatively flat in the first six months and in the back half we were going to see some growth as, as the, you know, demand and overall activity level started to increase. You know, we're obviously seeing a lot of volatility in that price right now. Alan Granch (President and Chief Executive Officer) So we are expecting, expecting that, you know, volumes are going to contribute and I think it's just an easier way for us to just characterize them as liquids processing and solids processing. And you know, throughout, you know, the last, you know, few weeks in terms of having conversations with some customers, I think, you know, our business last year really showcased that even through these low commodity cycles that the volumes are relatively robust in terms of, you know, where we're seeing break evens. Alan Granch (President and Chief Executive Officer) I think you look at Western Canada, a lot of our plays break evens at a $50 WTI. If you look in the US it's 55. And so when you get to these break even levels, what we see is that recurring production volume coming through our liquids processing facilities and our landfills. And I think one thing that we've added here, and this might be helpful for a few potential shareholders and investors, is we posted on our website our updated investor presentation and it goes through what we've seen over the past few years in terms of growth, in Western Canada and you see production growing at that 2 to 3% per year and you can see the movements in WTI, but Alan Granch (President and Chief Executive Officer) it also goes through some of our volumes and what happens through volumes through these cycles and you can see the stability in it. And so I think that will give some color to those kind of looking for how stable the business is through these commodity cycles. And the fact that we upped guidance and it's at the higher end of the range just shows you it doesn't move significantly on the way down and it doesn't move significantly on the way up and it just, you know, points to. Everything we talk about is these volumes are very recurring. We see them at our facilities on a day to day basis. Konark Gupta (Equity Analyst) That's helpful and appreciate the investor presentation with some history on that. On the landfill side, what's driving the weakness here? I mean like, can you describe the nature of your landfills compared to, you know, the other solid waste companies? You're seeing a kind of different dynamic Konark Gupta (Equity Analyst) than maybe some of the solid waste guys. So what goes in there? Corey Hyam (Chief Operating Officer) Yeah, great. Good question, Connor. I think when you look at our landfills, there's kind of like three main drivers. The first being production waste that is generated every day. And we see this solid waste coming into our non has and our one has landfill that would represent approximately third of the volumes that we see on an annual basis. Very consistent. The second part of it would be reclamation. So you know, over a third of it would be reclamation driven. Corey Hyam (Chief Operating Officer) And as you know, in western Canada we've got regulation changes a couple of years ago that are mandating that any customer, whether you're in the industrial, mining or energy sector, you have to spend part of your asset retirement obligation on a ratable basis. That is approximately 5% per year. And so what we've seen in the landfills is that that 5% is required to be spent every year. So you see this reoccurring volumes that flow into the landfills and then finally is, you know, drilling, drilling volumes and drill cuttings, which are driven by, you know, where the commodity price is and activity levels on the rig count, they don't fluctuate as much as they did, you know, 10 years ago. You know, if you look at western Canada, the average rig count can, can move from 190 to, you know, 230. There's just not a lot of movement between, you know, higher activity levels and lower activity levels. So we do see a consistent stream on the drill cuttings as well. But in terms of the landfills, like when you, as I said, when you're in, into the lower, you know, $60 environment, which is what we saw in January and February, obviously we only had one month of increased wti, which you know, would represent more activity from our customers thinking, you know, potentially they're going to do more on the drilling side. And so our expectations were that things were going to be slower. You don't get a lot of cleanups happening in the colder months in, you know, call it January, February. It's just difficult to do that. So we typically see a higher peak season in Q3 and Q4 and we expect that trend to continue. So this is all within our expectations. And you know, when you look at not only our volumes into the landfills, but also our scrap metal volumes, you know, we're down one percent. That's exactly where we predicted. And my expectations would be that they're going to increase throughout the year. And then when you think about kind of longer term tailwinds here, I mean the strength in where WTI is going to land structurally, I think we change, and you're going to see some pretty robust activity in 27, 28, 29 as, as we have these higher energy prices for volumes to come into these landfills. And I said there aren't any more of these landfills being built. They're very difficult to build. We're in core areas where activity is taking place. And so I think what you'll see in our, in our reporting anyways is the volumes increasing over time. Konark Gupta (Equity Analyst) That's a great color, Alan. Thanks. And on the metal side, I'm curious, you know, I know we're adding a lot of rail cars and pushing the product into the US market, which obviously is probably helpful given the tariffs right now with the Section 232 changes that we have seen recently. On the tariff side, have you seen any incremental or decremental impact on scrap metal demand in Canada? Corey Hyam (Chief Operating Officer) Yeah, Konark, it's Corey. We haven't seen any impact today. About 95 percent of our shipments of scrap are outgoing into the US today. Still remain about in that low five percent sort of numbers into the domestic market, but nothing on the radar and no impact to 2026 as we see it today. Konark Gupta (Equity Analyst) Okay, thanks. And last one for me before I get back in the queue. On the pricing side, are you guys surprised how resilient the pricing had been last three years? I mean, you have seen about what, five percent maybe annually. Do you think this is sustainable going forward? I mean, the inflation clearly is not moving down more substantially now in light of what's happening around the globe. But do you think there's further opportunity for pricing here? As you said, you know, the regulations require and the complexities require more outsourcing than in sourcing. Any thoughts on the pricing going forward? Great, I appreciate the time. I'll be in the queue, thanks. OPERATOR As a reminder, if you wish to ask a question, please press Star one. Your next question comes from Arthur Nagorny with RBC Capital Markets. Please go ahead. Arthur Nagorny (Equity Analyst) Hey, good morning. Just wanted to start on the GFL transaction. I guess my first question, I appreciate the rationale outlined in your materials, but why is now the right time to pursue a sale? Especially considering how supportive the oil price backdrop is at this time? Alan Granch (President and Chief Executive Officer) Thanks Arthur. Yeah, no, great question. You know, as I noted, I think over the past few years Secure has continued to execute a clear strategic repositioning within the waste sector. And I think our investors have a better understanding of, you know, the nature of of our high quality infrastructure backed businesses. And I think we've been very clear on the stability of the cash flows, the durability on the growth and the financial metrics of which they, you know, which we have. And so over the past while I think, you know, our multiple has increased I think reflecting a clear understanding of that but we recognize they could be higher. When you look at this transaction, I think it accelerates that recognition capturing that intrinsic value today. And you know, we are also very aware that our shareholders will have some meaningful participation on the upside of having 80% in GFL in the combined entity. I think when you also look at you know, the share price premium on the 60 day, that was a 23 percent premium to the vwap. And you know, when you think about the context, the timeframe when we started having the conversation, you know, a couple of months ago, obviously all the volatility in the commodity was pre that and obviously some of the uplift in our share price but we're up 70% year to date and then you're getting a premium on top of that. I think when you look at the combined business, the scale that we have together, just overlapping their call it collection infrastructure and all of our critical infrastructure, post collection and being able to put that platform together, I think create some significant value. I think we bring that high margin free cash flow profile that's going to improve the overall pro forma entity as well. You know we went and did a fairness evaluation. RBC and both APP and ATB I think provided fairness opinions as we looked at the business. But you know we think about intrinsic value every day and our board is very thoughtful on that value. And we looked at our strategy as as a standalone business and our strategy, you know, together with GFL and obviously we felt, you know, being in the business for 19 years, combining with GFL and layering our infrastructure and looking at the opportunities was, was very attractive to us and felt like, you know, this is the opportunity for us. I also considered, you know, M and A, you know and, and I've been working on this M and A strategy on the metals which has been hugely successful in Western Canada. I think we're at the tail end of that. And when you think about, you know, future M and I think for us was getting a bit limited when you know, we're now looking at business lines that you know, GFL competes in today they've got a hopper of opportunities and I think when you think of that M&A opportunity on their perspective, I think they're very efficient and they're very good at integrating businesses. And I think when you look at our where we're really strong at, it's our organic growth platform where we can, you know, grow our hopper of opportunities. You know, We've been spending 100 million per year and adding some really great new projects that contribute, you know, 20% after tax IRR. These are great projects. And so I think when you put the two businesses together with these, you know, management teams, I think you got a very high quality business. Arthur Nagorny (Equity Analyst) Okay, that's helpful. And then I know it's still early in the process, but do you have any preliminary views on potential divestitures that may be required from the competition bureau review or anything? You know, if not required, maybe any voluntary sales of any business lines or anything of that sort? Alan Granch (President and Chief Executive Officer) Well, I mean, we're just in the midst of doing all of our analysis on what's required for the competition bureau submission. That will have to go in here relatively shortly where we'll provide our overall views of, you know, how the businesses overlap today. I mean, really, when we looked at it, there were really no material issues on combining the two businesses. The competition bureau is very knowledgeable about this market. We've been through it, obviously with them in the past. We recognize that this process is going to take three to five months for them to really make their assessments and we'll give them all the data that they need to. But at this point in time, no, we're not. We're not thinking there's going to be any sort of material divestments. But again, we're not quite done the analysis and we'll need to go through it. But that process, you know, as we, you know, get more educated on it, we'll, you know, we'll be smarter and we'll. We'll update accordingly. Arthur Nagorny (Equity Analyst) Got it. Then maybe switching over to the quarter and looking at the metals recycling business. Seems like there's a few moving pieces there overall, but quite strong performance in the base business even when factoring in the Edmonton facility acquisition. Can you maybe dive into some of the drivers there a bit more between what you're seeing? I think you called out U.S. and Canadian demand being strong and I guess Canadian picking up. But then also on the pricing side, maybe both on the prices you're getting, but also on the prices you're paying for the scrap metals. Corey Hyam (Chief Operating Officer) Yeah, I mean, we. You nailed it. We. The performance of the metals recycling business in Q1 was quite strong. It's, it's a combination of increased volume across the scale. It's a combination also adding in inventory reduction that we've been working through the last couple of quarters based on, you know, the inventory build in Q3, Q4 last year, because we couldn't move some of the volume as we were reestablishing some of those downstream markets, you know, quarter-over-quarter, the pricing that the mills were paying for is a little bit higher. We paid a little bit lower for scrap across the scales in Q3 and Q4. So we're realizing some of that benefit and we're also realizing just the integration efforts and the improvement in logistics that we've had over the last couple of quarters. So I think when you, you pack all those three things together and set up for a really strong quarter in that business. Arthur Nagorny (Equity Analyst) And I think too that just to add to it, I mean, we just purchased another 50 railcars. And these 50 railcars, why that's important is now we have enough and I think we're getting delivery here in August. When you think about the cycle time into the U.S. i think we were sitting around 35 to 40 days cycle time. Our main goal here, and this is our competitive advantage, is to be able to move the scrap metal here from the Western Canadian market into central US and get that cycle time within 30 days. Because ultimately we're not in the business of taking any commodity risk. We're in the business of processing efficiently and really processing what we get across the scale to ultimately what we're going to get paid within a 30 day period. And so we've now opened up all these US markets where we can deliver the scrap. And I think that will start to knock down our inventory. But we've seen volumes coming through just because our competitors don't have the scale that we have in terms of being able to move the product via trains. So to Corey's point one, I think the US Market's quite strong right now, so we're going to see continued movement of scrap into the US but we're going to now have all the tools we need to make it as efficient as possible. All right, and then last one for me, I know the question about tariffs was already asked, but maybe just to double click on it a little bit, specifically thinking about the 232 tariff update that was announced a couple of weeks ago, would you expect any potential for indirect uplift to US Steel demand from these tariffs or is it kind of still too early to say? Corey Hyam (Chief Operating Officer) I think it's too early to say, Arthur. Still digesting it Arthur Nagorny (Equity Analyst) perfect. That's all for me, thank you. OPERATOR Your next question comes from Ann Gillies with Stifel. Please go ahead. Ann Gillies (Equity Analyst) Morning everyone. I wanted to go back and just talk about Competition Bureau approval again with respect to market share since you divested assets a few years ago. I guess the first question is, has there been any material change in, in your market share estimates? And the second one I would have is, as you're going through and prepping for this transaction, is there any instance of the Comp Bureau going back and looking at such a niche industry this quickly in such quick succession? Alan Granch (President and Chief Executive Officer) Thanks, Ian. No, good question. I think, you know, when you go back to the Turvita Secure merger, that was a fulsome analysis of all markets in which we operate. And as you know, we took that all the way to the federal court and then the Supreme Court. And so this is case law. And when you looked at the competitive environment in those markets, which is substantially, you know, the majority of our critical infrastructure, and we looked at the competitive, you know, players, GFL wasn't one of them. So, so I think there's case, case law examples here that showcase that this, this doesn't have a lot of competition issues embedded in it within this transaction. And so we do know on our waste transfer facilities where we offer some similar services, they'll look at, you know, whether there's a similar customers, they'll look at other competitors in the market and see whether or not, you know, we have a market share that would be considered, you know, anti competitive from this transaction. We're still working on that. We're going to have a final conclusion here as we report our arc to the Comp Bureau. But I think, I think we'll be able to work through with them. This is not material at all. And you know, I think, you know, when it's relatively minor like that, we should get to a conclusion in a relatively quick manner. But again, we just want to make sure they're up to speed and seeing what we're seeing within this marketplace. But we think again, I mean, they've got to go through their process and we're going to try to make it as easy as we can for them because we want to get to close and move on with the combined entity. Ann Gillies (Equity Analyst) Understood that that's, that's helpful. And maybe moving to your conversation about the guide, this question is inherently going to be hard to answer, but how did you think about providing that commentary in the context of how long oil prices are going to remain elevated for and maybe put a different way if the situation persists through the end of the year. Do you think that would be lead to more positivity in how you're thinking about this year and next year and the EBITDA generation for secure? Alan Granch (President and Chief Executive Officer) Yeah, you know, it's a good question because I think, you know, we had, we had in our own budget, had $65 WTI. I think we recognized the back half of this year was going to be stronger with demand supply getting to that equilibrium. Our producers, you know, at the start of the year came out saying, you know, some of them were growing at 4 to 5%, some of them were growing at 2 to 3% based off that forecast. They're not materially changing that because of all this volatility going on. They've got their plans through Q1 now, Q2. I think a few of the smaller players that are a little bit more nimble are going to look at that spark spot opportunity and potentially transact on it. And typically when we see increases in activity, then you start to see that lag effect in the next quarter in your waste volumes. But I think structurally we recognize that, you know, WTI over 70 is probably what our future is going to indicate. I mean, you've taken a lot of supply off the market in the last 30 days. I think you've got geopolitical risk now that is going to be systemic for quite some time. And so I think structurally, you see the large investment that's now coming into Western Canada where you have a political environment and a resource base that is so strong. I mean, you saw shells move by taking out ARC and they're looking at attache and looking at lng. I mean, I think the prospects here for Western Canada are very strong. And I think when you look at WTI for 27 and beyond, even the next 10 years, we've been in a bottom cycle for quite some time and performed very, very well. When you think of our customers in Western Canada and now we're hitting the upswing of that, I think is going to be very, very positive. But again, these larger swings in wti, we know we're going to get more race volumes on the production side and you know, eventually as drilling and equipment and people pick up, you're going to see that as an additional tailwind. So we're comfortable in moving our range up to, you know, to that 550 level. And you know, every quarter you get smarter about activity levels and you know, what customers want to do. I mean, we're relatively, you know, only as I said, you know, a month or better in as we think about activity levels. So as we get through Q2 more conversations, we'll have a better indication at the end of Q2 when we report as to what things are going to look like not only for the remainder of 2026, but what 27 is going to look like. Ann Gillies (Equity Analyst) Okay, last one. For me, Canada's going through a bit of an infrastructure renaissance or so it feels in oil and gas growth seems like it's probably a bit closer than it has been by rolling secure into gfl. Does it give your infrastructure team a bit more flexibility, pursue larger projects than it might have done so in call it over the previous 10 years? Alan Granch (President and Chief Executive Officer) Yeah, I think it's a good question. I think you know, when you look at the overlay of GFL's infrastructure and our infrastructure, I think first and foremost there's going to be some revenue synergies here where when you look at our networks and what GFL currently offers to their customers now we're going to offer an even larger suite of services that that customer needs. And when you think of some of these larger they want a one-stop shop where they can say I'm going to outsource my non haz and hazardous waste to this company because I know they have the infrastructure and the collection network to be able to deal with it. And so we know that that is going to be great for our customers. I think internally we know that we could leverage off of each other's infrastructure. Whether they're using third party today or we're using third party, we're going to make sure that that comes together. This isn't really a cost synergy opportunity. I mean obviously there's the pump co and redundancy cost that we're going to be able to benefit from. But to your part B of your question, just in broad sense I think you know, when I see activity levels increase and I see you know, opportunities like LNG Canada Phase 2 and I see WTI on the higher end of the spectrum, what you do see is more need for infrastructure. And we have infrastructure located in areas where I think we're going to need to to expand. So to your point, I think our hopper right now of 3 to 400 million of organic new project opportunities that we wanted to execute on in the next couple years that can definitely grow in this type of environment. And so one you've got cost advantage by almost being at investment grade here in terms of, you know, where we want to put this capital to work. So I do think this, this hopper of opportunities will grow and we'll be able to execute it with this larger platform. I think one thing that might be. Konark Gupta (Equity Analyst) You now have a question from Konark Gupta with Scotiabank. Please go ahead. Yeah, thanks for squeezing me in, Alan. I wanted to understand the mix of the business a little bit more for me. So I mean you guys have grown the metal recycling through acquisitions and organic growth. Obviously produce water is growing pretty fast as well. If you look at your business mix today, would you say the mill recycling would be breaching above the 10% mark on EBITDA basis? And what do you think specialty chemicals are contributing these days? Alan Granch (President and Chief Executive Officer) Yeah, I think when we look at our business mix and the business segments in general, yeah, I mean I think we're just above 10% on metal recycling. You know, when we looked at our hub and spoke opportunity and obviously GRI last year was a critical component of that. Adding that mega shredder and efficiently processing, you know, there was a couple other tuck ins we could potentially do that. That'll be a future conversation with, with Patrick and Luke on where it's best to allocate capital. But I think the asset structure we have at metal recycling right now is well situated to be a standalone business here for the foreseeable future. We like where it is, but that's just on the secure basis. I think when you roll it into GFL's larger, broader solids platform, it's very, very small in terms of specialty chemicals. Yeah, they'd be slightly above, above where metal sits today. I mean they, they really benefited from some, some specific chemistries and patents that they have around production waste. And so we characterize it as front end waste management. So when you're, when you're getting production out of the ground, you've got waxes, you've got paraffins, you've got scale, you got corrosion. And typically we're there providing that front end chemistry, stripping out some of that waste. That's very corrosive that clogs their pipes, et cetera. And so we do it on the front end and then any waste that we can't process just via chemicals that then is, you know taken via truck into our facilities where we're then processing it with equipment and with our disposal network. And so you know for those businesses, you know they continue to have, you know, good opportunities and they're great ran businesses and I think they fit very well in the overall network but they're relatively small in the grand scheme of the no thanks. Konark Gupta (Equity Analyst) That's great on that and on the growth capex. Maybe just to understand a bit, there's the incremental spending going. Can you share some thoughts on the target markets and customers for the incremental $25 million growth cap tax? Is it more on the waste side specific basins like maybe marketing or something or any thoughts here? Corey Hyam (Chief Operating Officer) Yeah, Konark, it's Corey, it's all on the wayside. We mentioned we're allocating some more capital for some rail cars and the remaining portion is around another some more water disposal assets in the Montney and you'll see those come online in Q1 of 2027. So we're just advancing those projects. There's a ton of demand for this service and we're happy to provide it and help our customers out that thanks. Konark Gupta (Equity Analyst) And then the 50 rail car order, where does it take a free fleet to now? Corey Hyam (Chief Operating Officer) Takes us to about 300 cars. About 250 of those are owned and about 50 are on short term lease or to be. They're coming up to end of life. So on a go forward basis you'll probably see us run around 250 cars that manages our platform. Konark Gupta (Equity Analyst) We also like these new cars because they have higher walls and they're a little bit deeper so they can actually transport 30% more and we're spending or paying for the same sort of transportation cost per car. So those older lease cars are smaller and you can't get as much material in it. So when we run the economics on these rail cars, you know it's quite advantageous when you think of the transportation costs into the US when you could put more scrap metal into the car. Makes sense. Appreciate the time. Thank you guys. OPERATOR Thank you. There are no further questions at this time so I will now turn the call over to Ellen Grant for closing remarks. Please continue. Alan Granch (President and Chief Executive Officer) Well, thank you again for your continued support of Secure. Please be reminded that Secure's Annual General Meeting will begin at 11:00am Mountain Time this morning via conference call. Questions at that meeting will be limited to the items formally up for vote. Thank you again, and thank you for your continued support. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.