Keyera Corp. ((TSE:KEY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Keyera Corp. recently held its earnings call, which highlighted a strong financial performance and significant growth through strategic acquisitions and project expansions. Despite a decrease in net earnings and marketing realized margins, the company demonstrated robust growth in key segments and maintained a strong financial position. The overall sentiment of the call was positive, with a focus on long-term growth and stability.
Strong Q2 Financial Performance
Keyera reported an adjusted EBITDA of $252 million despite incurring $12 million in one-time transaction costs, compared to $326 million in the same quarter last year. The net earnings were $127 million, a decrease from $142 million the previous year, with distributable cash flow at $159 million or $0.69 per share.
Growth in Key Segments
The Gathering and Processing segment delivered a realized margin of $111 million, up from $102 million last year. Meanwhile, the Liquids Infrastructure segment reported a realized margin of $143 million, an increase from $133 million, benefiting from long-term contracted volumes and strong utilization.
Major Acquisition and Expansion
Keyera announced a transformational acquisition of Plains’ Canadian NGL business, which is expected to be mid-teens accretive to distributable cash flow per share in the first full year. This acquisition is anticipated to increase fee-based adjusted EBITDA by approximately 50%.
Continued Growth and Project Sanctions
The company sanctioned three capital-efficient growth projects: Frac II Debottleneck, Frac III, and KAPS Zone 4. Over 100,000 barrels per day of new long-term contracted volumes were secured on KAPS Zones 1 to 4, underscoring Keyera’s commitment to growth.
Dividend Increase
Reflecting confidence in sustainable growth and financial stability, Keyera’s Board approved a 4% annual increase in dividends.
Decline in Marketing Realized Margin
The marketing realized margin was $60 million, down from $136 million last year, primarily due to softer commodity pricing and outages at AEF.
Net Earnings Decrease
Net earnings decreased to $127 million from $142 million last year, reflecting a decline in financial performance compared to the previous year.
Forward-Looking Guidance
During Keyera’s 2025 Second Quarter Conference Call, significant guidance was provided regarding the company’s growth and financial outlook. The company aims to achieve a 7% to 8% annual fee-based adjusted EBITDA growth from 2024 to 2027, supported by strategic advancements and the sanctioning of three capital-efficient growth projects. Additionally, the Board approved a 4% annual dividend increase. The recent acquisition of Plains’ Canadian NGL business is expected to be mid-teens accretive to distributable cash flow per share in the first year. Keyera reaffirmed its marketing realized margin range and adjusted its growth capital expectations.
In conclusion, Keyera Corp.’s earnings call reflected a positive sentiment with a focus on long-term growth and stability. Despite some declines in net earnings and marketing realized margins, the company showcased strong performance in key segments and announced strategic acquisitions and expansions that promise future growth. The forward-looking guidance further supports Keyera’s commitment to maintaining a robust financial position and delivering value to its shareholders.