AltaGas (ALA) Q2 2024 earnings summary

Executive summary

• Normalized EBITDA rose to $295 million in Q2 2024, up 23% year-over-year, and normalized EPS doubled to $0.14, modestly ahead of expectations.

• Record global/LPG export volumes reached 123,285 Bbl/d (+7% YoY), with strong cost management and capital investments supporting results.

• Utilities and Midstream segments both delivered significant normalized EBITDA growth, with Utilities at $122 million (+20% YoY) and Midstream at $175 million (+31% YoY).

• Major midstream projects (REEF, Pipestone II) progressing on schedule and budget, with significant EPC contracts executed.

• Mountain Valley Pipeline (MVP) completed and placed into service in June, now fully subscribed under 20-year contracts; monetization process initiated.

Financial highlights

• Q2 2024 revenue was $2.78 billion, up from $2.63 billion in Q2 2023.

• Normalized net income was $41 million ($0.14/share), up from $20 million ($0.07/share) last year.

• Normalized FFO per share was $0.61, up from $0.53 year-over-year; cash from operations per share was $1.52, up from $1.32.

• Invested capital in Q2 2024 was $307 million, up from $224 million, mainly for Midstream growth and Utilities modernization.

• Dividends declared per common share increased to $0.2975, up from $0.28 in Q2 2023.

Outlook and guidance

• 2024 guidance reaffirmed: normalized EPS of $2.05–$2.25 and normalized EBITDA of $1.67–$1.775 billion.

• Capital program for 2024 is $1.3 billion, with 54% allocated to Utilities and 42% to Midstream.

• Utilities expected to contribute ~55% and Midstream ~45% of normalized EBITDA for 2024.

• Focused on self-funding capital requirements, deleveraging, and considering asset sales including MVP stake.

• Preparing for potential rail strike with contingency plans; regular maintenance at RIPET included in budget.