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AltaGas Ltd. Reports Strong Q2 Earnings and Growth

AltaGas Ltd. Reports Strong Q2 Earnings and Growth

AltaGas Ltd. ((TSE:ALA)) has held its Q2 earnings call. Read on for the main highlights of the call.

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AltaGas Ltd. recently held its earnings call, revealing a strong quarter marked by significant financial growth and successful progress in key projects. The sentiment during the call was largely positive, driven by impressive performance in the midstream and utilities segments. Despite facing regulatory challenges in Maryland and construction delays due to weather, the overall outlook remains optimistic.

Strong Financial Performance

AltaGas reported a remarkable financial performance with a normalized EBITDA of $342 million in Q2, representing a 16% increase from the same quarter in 2024. The normalized EPS nearly doubled, reaching $0.27 compared to $0.14 per share last year, highlighting the company’s robust financial health.

Record Export Volumes

The company achieved record global export volumes of LPGs in the second quarter, delivering almost 128,000 barrels per day to Asia. This milestone underscores AltaGas’s growing presence in the global energy market and its ability to capitalize on export opportunities.

Successful Midstream Growth

Midstream throughput saw a 6% year-over-year increase, driven by the Montney assets. The segment’s normalized EBITDA rose by 23% from the previous year, showcasing the successful expansion and optimization of AltaGas’s midstream operations.

Utilities Segment Growth

The utilities segment experienced a 10% growth in normalized EBITDA from Q2 2024. This growth was fueled by modernization investments, improved asset optimization, and colder weather conditions in Michigan, which increased energy demand.

Expansion Projects on Track

Construction on the REEF and Pipestone II projects is progressing well. The REEF project is on time and within budget, while Pipestone II is expected to be operational by late 2025, indicating strong project management and execution capabilities.

Regulatory Challenges in Maryland

AltaGas is facing ongoing regulatory challenges in Maryland related to the Next Generation Energy Act and gas ban activities. These issues could lead to economic impacts and legal challenges, posing potential risks to the company’s operations in the region.

Weather Delays in Construction

Progress on the Jetty at the REEF project was delayed due to adverse weather conditions. However, recovery efforts are underway to mitigate these delays and ensure project timelines are met.

Retail Contribution Decline

The utilities segment saw a decline in retail contributions during the quarter, which slightly impacted the overall performance. This decline highlights the need for strategic adjustments to enhance retail operations.

Dependence on External Factors for MVP Monetization

The sale of the Mountain Valley Pipeline interest has been delayed due to operational due diligence and dependencies on expansion projects. This delay underscores the challenges associated with external factors impacting monetization efforts.

Forward-Looking Guidance

AltaGas provided forward-looking guidance indicating continued strong performance and strategic advancements. The company remains focused on maximizing asset returns, reducing financial leverage, and advancing growth projects like REEF and Pipestone II. AltaGas is committed to disciplined capital allocation and maintaining its 2025 guidance, emphasizing the delivery of reliable, affordable energy to its customers.

In conclusion, AltaGas Ltd.’s earnings call reflected a positive sentiment with strong financial growth and successful project progress. Despite facing some challenges, the company’s strategic focus and commitment to its goals provide a promising outlook for the future.

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