Good morning, ladies and gentlemen, and welcome to the SECURE Waste Infrastructure Corporation's second quarter 2025 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 this call you require immediate assistance, please press sta zero for the operator. This call is being recorded on Tuesday, July 29, 2025. I would now like to turn the conference over to Ms. Alison Prokop. Please go ahead.
Thank you, and good morning to everyone who is listening to the call. Welcome to SECURE's conference call for the second quarter of 2025. Joining me on the call today is Allen Gransch, our President and Chief Executive Officer, Chad Magus, our Chief Financial Officer, and Corey Higham, our Chief Operating Officer. We'll be making forward-looking statements during this call. These statements reflect current expectations and are subject to a number of risks and uncertainties. Actual results could differ materially. We will also refer to certain non-GAAP financial measures, which may not be directly comparable to similar measures disclosed by other companies. Please refer to our continuous disclosure documents on SEDAR+ for more information on risk factors and definitions. Today, we will review our financial and operational results for the three and six months ended June 30, 2025.
I will now turn the call over to Allen.
Thank you, Alison. Good morning, and thank you for joining today's call. SECURE delivered solid second quarter results that reflect the resilience of our infrastructure-backed model and our continued focus on maximizing value through capital allocation. Adjusted EBITDA was $110 million or $0.49 per share, reflecting a 14% year-over-year increase on a per-share basis from Q2 of 2024, even as total adjusted EBITDA declined modestly due to a more typical spring breakup, active forest fires, and near-term volatility in the metals recycling segment from U.S. steel tariffs. We remain focused on creating shareholder value through disciplined capital deployment. So far this year, we've returned $286 million to shareholders through dividends and share repurchases, including completing a $137 million substantial issuer bid and repurchasing an additional $104 million under our normal course issuer bid. In total, we purchased 7% of our common shares outstanding year to date.
On the growth front, we deployed $43 million of our $125 million capital budget in the first half of the year, advancing several projects that will drive recurring long-cycle returns. The phase III expansion at our Clearwater Heavy Oil Terminal was completed in the first quarter and is fully operational. Construction continues on two new pipe-connected produced water disposal facilities in the Alberta Montney, both under 10-year contracts with strong counterparties. The first facility is expected to be operational in the fourth quarter of this year, with the second facility expected to be in service early 2026. Upgrades are underway to our reopening of our waste facility in Alberta's Industrial Heartland. We've also added to our railcar fleet, which we are increasing to approximately 200 cars to improve metals recycling logistics. Collectively, these investments strengthen our competitive position and are expected to support meaningful EBITDA growth in 2026.
In our metals recycling business, which represents about 10% of our operations, we continue to manage through challenging conditions related to U.S. tariffs, soft global demand, and trade policy uncertainty. We have implemented targeted strategies, including redirection of scrap volumes to the U.S., where tariffs do not currently apply, dynamic feedstock pricing, selective purchasing, and a shift toward non-ferrous volumes in order to protect segment performance and position the business for recovery. These efforts are ongoing, and we anticipate any impacts in the short term will likely be recovered in future months. Based on the above, we remain cautious but are maintaining our 2025 guidance in the face of ongoing macroeconomic volatility, supported by higher volumes in pricing, contributions from organic growth projects, and long-term industrial fundamentals. For the full year 2025, we expect adjusted EBITDA of $510 million to $540 million.
While the third quarter is typically our seasonal high point, we expect a modest shift in 2025 to the fourth quarter, representing the strongest period of the year. This reflects the anticipated timing of recovery in the metals market, as well as the phased-in service dates of the growth projects later in the year. We expect discretionary free cash flow of $270 million to $300 million, growth capital of $125 million, sustaining capital of $85 million, and asset retirement obligation spend of $15 million. The long-term fundamentals of our business remain intact: consistent energy demand, mandated liability reduction, and steady industrial activity. Our infrastructure supports reoccurring waste streams and is built to perform across cycles. We provide critical regulatory-driven services through this infrastructure, helping our customers meet environmental obligations while ensuring safe, compliant waste handling.
Our balance sheet remains strong with a total debt-to-EBITDA covenant ratio of 2.0 times or 1.8 times excluding leases. We extended our revolving credit facility in the second quarter to 2028 and increased its size to $900 million, giving us ample liquidity to support our strategy. Last week, we released our 2024 sustainability report, and I want to take a moment to highlight some of our most impactful progress. We exceeded our three-year GHG reduction target, achieving an 18% reduction since 2021. We returned 721,000 cu meters of water to the watershed, reducing free water use by 6% over 2023. We spent a record $13.4 million with Indigenous suppliers, marking SECURE's continued commitment to supporting our Indigenous partnerships. We also completed our first five-year sustainability strategy and are now moving toward more actionable short-term climate goals aligned with emerging frameworks and technologies.
Sustainability is more than a strategy for us; it is embedded in how we operate, manage risk, and create long-term value as we transform waste into value. To close these opening remarks, we are closely monitoring evolving market conditions but remain on track to deliver our 2025 plan and exit the year with solid momentum heading into 2026. Our infrastructure network is built for resilience, our growth projects are backed by commercial agreements, and our capital allocation strategy is delivering significant value. With that, I'll turn the call over to Chad to review the financials in more detail.
Thanks, Allen, and good morning, everyone. From a financial standpoint, the second quarter demonstrates our ongoing focus on per-share growth and capital efficiency. Revenue, excluding all purchase and resale, was $353 million, up 5% from Q2 2024, supported by steady volumes across our core waste network, pricing increases, and contributions from the Edmonton Metals acquisition. Net income was $31 million or $0.14 per share, up 17% year-over-year on a per-share basis, as our capital return strategy continues to drive significant growth in per-share metrics. As Allen noted, adjusted EBITDA was down 4% on an absolute basis from the second quarter of 2024, largely reflecting seasonality, the impact of forest fires, and a challenging market for metals recycling. In addition, the prior year results benefited from a storage opportunity in energy infrastructure relating to the opening of the Trans Mountain Pipeline system.
We saw continued strong cash flow conversion from adjusted EBITDA this quarter, with discretionary free cash flow of $54 million, up slightly from last year on an absolute basis, but an impressive 20% increase per share year-over-year. This level of free cash flow allows us to support our dividend, fund growth, and continue repurchasing shares. We maintained our regular quarterly dividend of $0.10 per share and ended the quarter with liquidity of over $300 million. Looking ahead, we believe our strong balance sheet and robust projected cash flows provide us with the flexibility to execute on our capital allocation priorities, including advancing high-return organic projects, maintaining our quarterly dividend of $0.10 per share, equal to approximately $88 million annualized based on current shares outstanding, opportunistic share repurchases through the NCIB, which provides a flexible way to return capital to shareholders.
Management and the Board of Directors continue to view share buybacks as an attractive use of capital at current valuation levels, and lastly, maintaining our strong balance sheet. I'll now pass on to Corey for some operational detail.
Thanks, Chad. Our operations teams performed well throughout the quarter despite seasonal disruptions from spring breakup and active forest fires near several operating regions. As forest fires become more frequent across western Canada, our operational teams continue to refine and implement robust emergency response protocols and site-level contingency planning. These efforts have enabled us to protect our people, maintain service continuity for our customers, and minimize the operational impact of these events. At our waste processing facilities, we processed on average 92,000 barrels per day of produced water and 40,000 barrels per day of slurry and emulsion. We also recovered 277,000 barrels of oil and weight from waste streams, reinforcing the value we create. 568,000 tons of solid waste were safely contained across our landfill network. Overall, volumes were broadly stable year- over- year.
The second quarter's throughput was impacted by a combination of seasonal factors, including spring breakup conditions, active forest fires near several operating regions, and gas plant turnaround activity. In particular, the scheduled maintenance and shutdown of a third-party gas plant temporarily impacted our produced water volumes in the Mountain Ewapiti area. This facility is connected to our customers' production, and the turnaround led to a short-term reduction in upstream volumes, which are expected to be restored in early Q3. We view this investment positively as it enhances long-term reliability and throughput capacity for the region. These headwinds were partially offset by additional processing capacity brought online at our Clearwater Heavy Oil Terminal. Our metals recycling business saw significant contributions from the Edmonton acquisition. While there are challenges in the ferrous market, we're repositioning our operations to optimize costs and enhance flexibility.
We expect these strategies will help mitigate the macro factors impacting the business and set us up well for recovery. In specialty chemicals, we're seeing strong customer demand and continued market share gains despite the typical seasonal lag in Q2 compared to a strong Q1 in prior year Q2, which benefited from unusually favorable weather conditions. In energy infrastructure, volumes averaged 135,000 barrels a day, an increase of 12% from Q2 2024, driven by increased throughput from the expansions of the Clearwater Heavy Oil Terminal. Our capital program to spend $125 million on growth projects and $85 million on sustaining projects is on track. Major projects are advancing on schedule, and we're seeing strong customer interest in additional capacity, which will inform our capital plans for future years.
Thanks, Corey. To wrap up, we're pleased with our progress so far in 2025. We've delivered stable results despite seasonal and macroeconomic challenges, advanced our high-return, contract-backed capital program, and returned $286 million to shareholders through dividends and buybacks, driving meaningful per-share growth. Operationally, our teams continue to perform well, executing projects that strengthen our infrastructure network and lay the groundwork for higher EBITDA in 2026. In our metals recycling business, we've responded quickly to volatility with targeted strategies that will help protect margins and better position us for recovery. Our balance sheet remains strong, giving us flexibility to invest in growth, return capital, and navigate ongoing market uncertainty. At the same time, we continue to lead in ESG, focusing on operational safety, minimizing environmental impact, enhancing community value, and delivering long-term returns. Looking beyond 2025, we remain confident in the long-term fundamentals that underpin our business.
Canadian oil and gas production continues to show resilience and steady growth. With more than 80 strategically located high-barrier facilities across western Canada and North Dakota, SECURE is well-positioned to meet growing demand for our waste and energy infrastructure. Our network provides both expansion capacity and stability across market cycles, supporting consistent volume growth through 2026 and beyond. Thanks again for joining us today. We'd now like to open the line for questions.
Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, make sure to lift your handset before pressing any keys. Your first question comes from the line of Michael Doumet from National Bank . Please go ahead.
Hey, good morning, guys. I guess I'm going to start by saying I think most people are thinking today I'm a little surprised, given the cautious tone in Q1 and the incremental headwinds from the tariffs and the forest fires, that you guys maintained the 2025 EBITDA guide. With that, nicely done, obviously. Given some of the incremental pressures, can you expand on maybe some of the areas that you saw some upside? More generally, is there an area, be it the low, mid, or high end of the guide, that you feel most comfortable with today?
Morning, Michael. Thanks for the question. Yeah, I think, you know, as we look through Q2 operating results, I think the headwinds we faced were obviously the forest fires that impacted some of our customers' production when they had to shut in some of their facilities. Obviously, you're processing less waste. We also had the tariffs on Canadian steel and a lot of these mills, you know, difficult to operate when you have an additional 25% tariff. Those were the headwinds we faced. You know, offset by, you know, we were pleased with the volumes that we saw in Q2. It's probably more of a typical Q2 that we experienced, but pleased with the volumes. We're starting to see that happen here as we entered into Q3, where, you know, we're anticipating the volumes are going to be strong.
We do believe that, you know, we have this uncertainty around where we're going to get to on this tariff and trade agreement with the U.S. I mean, we can't anticipate what's going to happen on August 1, which is why we put the cautionary note. We're still six months away from full-year guidance. To make a decision as to how this is going to play out, how it's going to impact our metals business is difficult to make that judgment call. We have some positives. We've also got some positives from some of the organic growth that we're currently spending right now. We've got a couple of those projects that are advancing nicely that will come on in the fourth quarter. We think that if there is opportunity to move some of that scrap metal into the U.S., if that happens quicker, faster, that'll happen in Q3.
If not, it'll get pushed to Q4. There's lots of moving parts here, which is why we maintain guidance until we have more clarity on where all of this is going to play out. I would say, yeah, you got positives and negatives, and we're trying to do the best here to balance out where we think everything is going to land. I think one of our advantages on the metals side of the business, and I think, you know, we did an investor tour back in June, and we had this discussion, is our advantage right now on metals is we have 200 railcars and we have the ability to ship into the U.S. and further into the U.S. A lot of our competitors move scrap metal by truck, so we can move it by train, opening up more markets for us.
Some of these markets, you know, we haven't used them in quite some time, but the fact that they're there, they can do test loads and we can move multiple scrap loads down there, I think gives us a huge competitive advantage. We just don't know how long that takes to transition. I know it's a long-winded answer, but I'm trying to give you a bit of, you know, our thought process as we think about where our guidance is and some of the cautionary pieces we put in the outlook.
Yeah, no, I definitely appreciate the details. Thanks, Allen. I guess further to that, you know, there's a line in the outlook that I think is new, and you discuss how you expect volume growth and robust EBITDA contributions from your organic capital program well into 2026 and well beyond. I mean, are you expecting outsized EBITDA from your capital program in 2026, and is there improved visibility into 2026 already in terms of volumes?
Yeah, I think, you know, when you're doing these large capital programs and specifically in the Montney, we're seeing a lot of water from that area. A lot of our customers are trucking water, you know, two hours away from a specific location, and it's why we're tying in directly into their infrastructure. The geology is just very tight, and you're seeing this huge amount of water coming through. We're already talking about what they need in 2026 in terms of opportunities to continue to kind of tie into their network to avoid some of these larger trucking costs. That's giving us clarity that we see the volume growth out of this area being substantial. We're also seeing the growth out of Northeast BC.
I mean, we had LNG Canada just started to commission and start up, and there's going to be a lot of activity happening in Northeast BC to support some of the gas that's going to now flow into Kitimat and be operational, where we're managing the waste as well for LNG Canada. We're seeing these markers and we're seeing what's happening in some of our facilities where the produced water volumes remain quite strong. I think that gives us not only that organic element, but it also gives us that same store sales or that volume growth expectation as we head into 2026.
That's great. I'll leave it there and get back to you. Thanks.
Thanks, Michael.
Your next question is from the line of Arthur Nagorny from RBC Capital Markets.
Please go ahead.
Hey, good morning. I think you mentioned in your prepared remarks that you expect a recovery in the metals recycling business towards the back end of the year. Can you maybe just parse that out a little bit more and maybe even quantify your expectations for H2 relative to the first half of the year?
Yeah, Arthur. I think that, you know, when you talk about the first half, I think we've addressed the question in terms of the challenges we've had in the ferrous market. Typically, in steel production, most of the turndowns in steel production happen during the summer for summer turnarounds, and they clean up the mills, so to speak. Once we get through August here and we see the mills, specifically the U.S. mills, start to ramp up a bit, we'll see more demand for scrap. As Allen mentioned, with the railcars that we do have, we're seeing at least more than a handful of new mills take some of our product with intention to take even more through the back half of the year. We'll see if we'll get back to the regular run rate towards the end of the year and into the first quarter of 2026.
There are some green shoots sprouting here in the metals business. For the middle part of the year, we've just had to pivot and adjust our strategy.
Okay. Maybe sticking on the metals recycling business, the Canadian government has recently taken steps to protect the domestic industry. I know it's still early, but can you maybe comment on what kind of market reaction you've seen to date?
I think you hit the nail on the head. I think it is still a little bit too early. We'll see the impact. We haven't yet to see the impact on the Canadian steel market. I think we just have to leave it at that because it's still pretty early days in terms of that announcement.
Got it. Maybe just touching on the forest fire situation a little bit more, can you maybe quantify the impact in Q2? Is this situation in a better spot as of today, or is it kind of similar to what we saw in Q2?
Oh, no, we're in a much, much better spot than we were in Q2. Just to put it in perspective, none of our facilities were shut in as a result of the fires. They were just limited. The activity levels within those facilities were impacted because our customers' volumes were cut back because they're managing their own production. To put it in perspective, it's maybe a 5% to 10% volume impact on a week or two basis based on wherever the forest fires were burning. Pretty minimal impact at the end of the day.
Got it. That's helpful. The last one before I jump in the queue, I know it's a smaller part of your business, but can you give us some color on how the North Dakota business is trending relative to maybe your Canadian business?
Yeah, I think when prices dropped, WTI prices dropped at the beginning of Q2, there was an immediate slowdown in those facilities. I think as we progressed through the quarter, it rebounded back to sort of forecasted volumes at this point. Short-term impact at the beginning of Q2, but we're seeing regular volumes into Q3.
Thank you.
Your next question is from the line of Steven Hansen from Raymond James .
Please go ahead.
Good morning, guys. Thanks for the time. Just wanted to ask about the inventory levels that you're strategically holding here in the short term. How should we think about the unwind of that inventory? Is it just going to be dependent upon market conditions? Do you think it's a 3Q event or more 4Q or even into early next year? How do you think about it?
Morning, Steve. Yeah, no, good question. I don't know. I'm not saying it's a strategy so much. I mean, our plan with the metals recycling facilities that we've acquired and our hub and spoke model is really about to drive efficiencies through that shredder, but really to turn our inventory on a monthly basis. If we have the Canadian mills running today at the capacity that we know they have, we would be turning that inventory. Our goal isn't to store any inventory. It's really to turn it and maintain that margin and maintain that consistency. It's really, you know, it's been since the tariffs have come on and we've lost the Canadian market and now are shifting into the U.S. market, it's really just a function of timing. We've lowered the price that we're willing to accept scrap.
As we see scrap coming in, as we process it, we have to send this scrap into the U.S. market. The U.S. market would like to take a test load of it before they're going to agree to multiple loads. That takes a month. You have to turn the cars back and then you start, you know, shipping more rateably. That process just takes a bit of time. We will likely have to hold more inventory in Q3, which then subsequently adds to margin and adds to profitability into Q4 and into Q1, which is why we're saying it could get pushed out a little bit. That being said, if we get an agreement here on August 1, the Canadian mills start to ramp back up. Now we've got to get all of our inventory. We could start to move very, very quickly.
There's just a variety of scenarios that could play out here. We are taking the more proactive strategy of moving into the U.S. market, but if something changes in the Canadian market, that could change the outlook of Q3 and not push as much into Q4. It's still undetermined depending on how this all plays out. You're right, we will have a bit more inventory here as we think about Q3.
Okay, very helpful. Thank you. I know you're not getting too specific on all this, but you've disclosed that the metals business is roughly 10% of the run rate. Is there an ability to handicap on what you think the hit might have been in just the quarter on the metals business? Again, knowing the scenarios are still uncertain going forward, just to sort of give us a quarterly impact of the metals being down, do we have a rough sense of dollar value?
I think I would say the impact was, we're calling it a small amount, like a couple million maybe. It's not material. Most of the impact was in June, following that increase of 25% because the Canadian mills were canceling orders. Some of those orders were in transit, and there was a $2 million impact there, and some of it would then get shifted into Q3. We talked a little bit about the differences between 2024 Q2 results and 2025. Part of it was we had some storage profits on Trans Mountain last year. That obviously boosted 2024 profits, offset by some of the things I was talking about within our volumes. There were a few moving parts here in 2024 compared to 2025. Pretty happy with the results in Q2 and our team being able to navigate some of these challenges that just kind of hit them.
These are macro challenges that you face. It's not operational challenges.
No, understood. Appreciate the color. That's great. Thanks, guys.
Yeah, thanks, Steven.
Your next question is from the line of Konark Gupta from Scotiabank.
Please go ahead.
Thanks, and morning, gents. Just maybe to square off first on your EBITDA guidance to Michael's question, perhaps in a different way. If you are looking at, call it a 6% decline in the first half on EBITDA, you probably need about 14% or so in the second half growth to hit the bottom end of the range. You talked about the seasonality shifting from Q3 to Q4 this year, but it sounds like Q3 might still be a better quarter than last year's Q3, and Q4 will be much stronger. Is that a fair way to characterize how things are shaping up at this point?
Yeah, good morning. Typically, when we go back in time, after breakup in Q2, we see a lot of activity in Q3, and that's usually our high water mark for the year. Just given the acquisition, the metals acquisition in Q1 this year, and just what we've already talked about with that expectation, we expect Q4 to be the busiest quarter of the year there. With where our organic capital projects have, where we're spending the money and just when they're going to come online, some of them, one of them is going to start to contribute, we hope, early in Q4, which again just drives that number a bit higher. You're right. We do expect a significant increase in our results in the latter half of the year, but I think that's in line with our initial expectations.
Thanks for the clarification. You talked about, I think, in your prepared remarks as well as on the questions, in terms of how these projects that are coming online, the metals recycling business maybe resetting or normalizing over time, perhaps, and the capacity expansion you have been doing so far, those all things come together in 2026. In a base case scenario, when you do not have more growth CapEx to spend for new projects in 2026, are you expecting, like what we are looking at in the second half of this year, and obviously subject to seasonality and all that, should we annualize the second half to get some sense in 2026?
Yeah. Hey, Konark. Yeah. I think, you know, when we think about our organic opportunities, if I look at last year, we were around $75 million. This year, we're $125 million. I think our expectations are with some of the projects we have in the hopper, we could likely, you know, complete projects in that $80 to $100 million in 2026. Even, you know, we're starting to work on 2027 opportunities as well. There's always going to be this element of organic growth that is going to apply in these periods where you'll have to account for. I've talked a little bit about volume growth. I mean, typically on the produced water, we're in that 3 to 4%, our emulsions in that 2 to 2%, which is very consistent when we think about the year average as to where these volumes tend to be at.
On top of that, we have an element where we will include pricing as well. I mean, we continue to manage inflation and pass those costs through to our customers. You've got an element of volume growth. You've got an element of the pricing that we're going to be able to push out. You're going to have the organic projects that come in if you think about 2026. I also talked a little bit in the past about, you know, it's going to take us a little bit of time to get the full realization of the metals acquisition strategy. I mean, you don't buy these businesses and day one all the synergies come together. We've got to reroute where we're processing some of the metals. We also want to upgrade their IT systems.
We know that we have to work through the previous owner's inventory and process all that because we didn't want to pay for it. We want to make sure they're getting the price that's, you know, the spot market price. Those things take time to realize to fruition. When I think about the metals acquisition in February of this year, you know, it's going to take us 12 to 18 months to get full run rate of where we think that facility and our overall network could get to. You have to look at 2026 with all those factors in mind in terms of how you get to where that forward EBITDA looks like. We can go offline and give you a little bit more color on that. That's kind of the high-level assessment.
Yeah, no, I think that's very helpful in terms of thinking about the drivers that shape up the 2026. You talked about the volumes, I think, in Q2. I think on the waste management side of things, if I aggregate your water, the waste, landfill, etc., all the volumes are down in aggregate about 1% or so. I think there was a forest fire impact in there as well, right? What do you think was your underlying volume growth in Q2 if you strip out the forest fire effects?
Yeah, Konark, it's Corey, thanks for the question. I think when we look at normalized volume growth, it's around that 3% level. You're correct in terms of being a bit flat or down on volumes in the quarter. It was, again, when you have the wildfire activity and you have wetter weather, it defers a lot of work on the waste processing side. It defers a lot of the remediation reclamation projects on the landfill side. We'll get that volume into Q3 and Q4. The largest component of being flat in a quarter was really that turnaround that happened at the gas plant in the Dakota Grand Prairie, which if you back that out and you normalize our water volumes without that turnaround, we'd be 3% quarter- over- quarter growth on the produced water side.
I think we just had a bit of operational complexities and macro factors in the quarter that led to sort of that flat volume growth in the quarters.
Okay, that's helpful. The last one for me before I turn over, just on the tariff side of things, I know you talked about a couple of things there. One, the steel mills are obviously having an impact from tariffs, and we don't know what's coming out of that. At the same time, obviously, the scrap ferrous is not subject to tariffs. Is there an opportunity to, like, besides obviously the U.S. market you talked about, is there an opportunity to look into the ferrous exports or ferrous demand from some other end markets as the Canadian steel mills remain sort of in limbo for some time?
Yeah, so currently, Konark, on the non-ferrous side, most of the exports that we do are overseas, some through the U.S. market. With respect to exporting ferrous steel overseas, it becomes cost-prohibitive to move that volume. At this point, we're focusing on North American mills and specifically American mills until we see a recovery in the Canadian market for ferrous steel.
Okay, that's great. Thanks so much for the time.
Thank you.
Your next question is from the line of John Gibson from BMO Capital Markets.
Please go ahead.
Morning, and thanks for taking my questions. First, I was wondering if you could touch on pricing in your core waste management or waste processing business. You obviously spoke positively to it in the release, and we've seen some good comps from your peers. Wondering what it was like this quarter, and do you see some room for growth here in the back half of the year?
Good morning. Typically, on the pricing side of things, we would do an annual pricing review and start to roll that out at the beginning of Q4 for all of our customers. We would stick to that cycle. We will start to review pricing here over the next few months and start engaging in conversations with our customers. That is just sort of the cadence that we operate at. You can expect the same.
Okay, great. Second one for me. Just wondering about the impacts of some lower WTI prices on your business. Does your 2025 guide imply a bit of an uptick in commodity prices or maybe a widening of differentials, or is it sort of expectations of flattish prices here going forward?
Yeah, good morning, John. All right. What we use is just flattish for now. We don't have any kind of, I'd say, expectations that are firm one way or the other, but just relatively flat.
Okay, great. Thanks for taking my questions. I'll turn it back.
Your next question is from the line of Michael Doumet from National Bank.
Please go ahead
Yeah, thanks for taking the follow-up. Look, you guys have done a lot of buybacks since 2023, you know, following the sale of the assets to Waste Connections. I would say that not every company looks smart on a look back on large-scale buybacks, so kudos to you guys. I guess the question here is, how do we think about testing the upper limits in terms of share price for buybacks and maybe keeping something a little bit more balanced in terms of keeping some dry powder for, you know, either opportunistic purchases or M&A going forward?
Yeah, good follow-up question. I'd say on the buybacks, you know, when we think about the issuer bid we executed, we really fast-forwarded a big portion of our NCIB by doing that at what we thought was the price had just gone too low given the quality of our assets. We continue to monitor that each quarter as to where it is. You look at our balance sheet, you know, we're still under levered to where our target debt-to-EBITDA is. We do have that flexibility to continue to buy back the stock where we believe the intrinsic value in the multiple is higher than where it's trading at today. We still have a remaining amount on our NCIB, which we'll continue to pursue through this year.
You're right, I do see potentially some M&A here where, when we continue our metals strategy in terms of operational efficiencies and consolidating some of these mom-and-pops, I think they're going to be put in a position where, when you're not being able to sell to some of these Canadian mills and your only mode of transportation is trucking, I think there might be an opportunity where we should start to have some other conversations. The dry powder you speak of, I think, would be opportunistic for us to keep some of that dry powder as some of these potential opportunities play out in the next six months. It'll be a balance of, yes, we want to make sure we're getting the intrinsic value and buying back our stock when we think it's below the value it should be trading at.
At the same time, some of these opportunities could come to fruition. We want to make sure we can execute. I think Chad did a good job here in the second quarter by increasing our revolving credit facility, giving us a bit more capacity there. You got to remember too, this business kicks out 50% free cash flow conversion. We're kicking off a lot of free cash flow. It's not necessarily we're relying on debt. We're using free cash flow. We got lots of levers to pull here, which puts us in a great spot.
That's great. Maybe just to hit on one of the points there, Allen, do you think that the total addressable market for metals recycling M&A is above the previous number that you previously communicated? I wonder if you think the multiples that you can get them at are a little bit more distressed given the situation as well.
I think it potentially could be. I mean, I've talked about, you know, we have potentially another $100 million more of M&A to do. That number could go a little bit higher. I do think the opportunity for us to get more value there in terms of what multiples we would have to pay given the current economic environment. I think this is truly where scale and operational capacity really plays into our favor. I think you're right. I think it could go that direction, and we just got to see how it all plays out here.
Great. Thank you.
Thank you.
Your next question is from the line of Ian Gilles from Stifel .
Please go ahead.
Morning, everyone. As it pertains to M&A, is it plausible if a trade deal isn't announced August 1 and it stretches out a little longer than we thought, is it plausible to get M&A done in this sort of environment, or is it pens down until there's, I guess, some rules of engagement?
Morning, Ian. Good question. I think it's almost, you know, depending on where they're located, depending on their financial situation, depending on the family dynamics. They all have their own uniquenesses and a variety of scenarios that could play out. This has been, you know, we've been bumping along the bottom here for a period of time. I think that puts a lot of due stress on a lot of these families where I think they, you know, they're getting to points where they have to make decisions. I think, you know, from our perspective, we're there to work with them, but you can only take it so far. We're not dealing with investment banks and big corporations. We're dealing with small mom-and-pops. That's just the way the Western Canadian business has operated for a number of years.
I anticipate some will get done, but again, it's just hard to predict their dynamics. I don't know how August 1st is going to play out in terms of pushing them one step further. Good question.
Along the capital allocation lines as well, with the share price doing a bit better and valuation expanding, has there been any discussion yet around perhaps switching the strategy to a bit more dividend growth to see a move into 2026 and 2027, or is it still a buyback focus in the here and now?
Good morning, Ian. I think in the here and now, we're still focused on the ultimate valuation of the company and think buybacks are our best option. Along with our board, we continue to have that discussion and that could change. Hopefully, it does change one day when we feel like we're valued more appropriately. In the short term, I'm focused on buybacks.
Understood. Last one for me. If we think about where we are now versus when you originally released guidance in December, is there any new cost optimization initiatives that have been put in place since that time that perhaps give you a bit more confidence and a bit more control over getting into the range than you would have had at the time of announcement?
Yeah, I think on the G&A side, it's probably not as impactful as the operations, but we have, and we continually almost every year look at all of our costs and where we can become more efficient. We've had a lot of organizational changes over the last few years since merging with Tervita and then divesting some assets. I think we've done recently completed some initiatives there. With respect to operations, I think we're always doing that as well, but there's been nothing fundamental since putting out guidance. The largest operational improvement that we would be doing on a regular basis is just around de-bottlenecking and how can we get more throughput through the same asset that we have. It's a continual exercise that we do with the operating teams.
Understood. Thanks very much. That's helpful. I'll turn it back over.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star followed by the number one on your touch-tone phone. Your next question is from the line of Arthur Nagorny from RBC Capital Markets.
Please go ahead.
Hey, thanks for taking my follow-up. I know a lot can change before the August 1 deadline, but as it relates to the prospective implementation of U.S. tariffs on copper, can you maybe provide some preliminary thoughts on how this might impact your metals recycling business and maybe give us some perspective on the kinds of conversations you're having with customers today?
Yeah, I mean, I think at the end of the day, for all of the scrap that we're dealing with in the commodities, it's really a control we can control at this point. The conversations with the customers are really around, "Hey, we have supply. They pay a fair price for our supply." We don't have any insight today that things are going to change from the status quo. I have a hard time giving you a straight answer here, Arthur, because I don't know anything different than what we're being told today by our suppliers plus our customers.
We do ship a lot of our non-ferrous material internationally, so that opens up a lot more markets for us. It's not so much just what the U.S. does or if there's an impact to the overall price of copper that can get factored in from an international market's perspective. That market actually could be a positive for us on some of these moves because we do deal with a lot of copper.
That's helpful. Last one for me. Recovered oil was a bit of a drag on revenues in the waste management segment. Can you give us some perspective on what that looked like in the quarter? Can you remind us what the EBITDA margins look like in that business line?
Yeah, like I think, you know, when we look at recovered oil, we're recovering waste. We're processing waste and recovering oil all the time. I think when you look at Q2 of 2024, oil was $80 U.S. WTI. This second quarter was $63. The impact is minimal in terms of, you know, overall contribution to our bottom line. When you look at the margins, we were adjusted EBITDA margin of 31%. We, you know, go through our history. Q2 is always, you know, a bit of a softer margin. I think this year we're still projecting 33% margins for the 2025 year, kind of right on track to where we target. As Chad mentioned, you know, we've kind of just kept price flat as we think about the forecast. We're not here to predict where WTI goes.
We're here to, you know, ensure where the volumes need to be processed and what we think our expectations are through Q3 and Q4. I guess I would leave you with that we're thinking our margins will be on track at 33% for 2025.
Thank you.
There are no further questions at this time. I'd like to turn the call over to Allen Gransch for closing comments. Sir, please go ahead.
Thank you for your time today and the robustness of all the questions. That was great. We thank you and your continued support of SECURE, and we look forward to sharing our third quarter results in October.
Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.