Pembina Pipeline (PPL) Q3 2024 earnings summary

Executive summary

• Reported Q3 2024 adjusted EBITDA of $1,019 million (CAD 1.019 billion), net income of $385 million, and adjusted cash flow from operations of $724 million, driven by acquisitions, higher volumes, and strong marketing contributions.

• Completed acquisition of the remaining 14.6% interest in Aux Sable's U.S. operations, achieving full ownership and simplifying reporting.

• PGI, a joint venture with KKR, executed significant transactions with Whitecap and Veren, expanding infrastructure and committing up to $300 million for future development.

• Major project milestones included progress on the Northeast BC pump station expansion, RFS IV expansion, and the start of onshore construction at Cedar LNG, which reached FID in June 2024 with an estimated cost of US$4.0 billion and in-service expected in late 2028.

• Declared a Q4 2024 dividend of $0.69 per share, payable December 31, 2024.

Financial highlights

• Q3 2024 adjusted EBITDA was $1,019 million, flat year-over-year, with strong performance from increased ownership in Alliance and Aux Sable, higher NGL margins, and growing volumes.

• Q3 2024 earnings were $385 million, up 11% year-over-year, and earnings per share (basic) was $0.60.

• Cash flow from operating activities rose to $922 million in Q3 2024, up 43% year-over-year, mainly due to working capital changes and higher earnings.

• Pipeline volumes reached 2.7 million barrels per day, a 6% increase year-over-year, mainly due to increased Alliance ownership and Nipissi pipeline reactivation.

• Capital expenditures for Q3 2024 were $262 million, primarily for pipeline expansions and Redwater projects.

Outlook and guidance

• 2024 adjusted EBITDA guidance narrowed to $4.225–$4.325 billion, trending toward the midpoint based on current commodity prices and Q4 volume outlook.

• Anticipates 4% exit-to-exit growth in conventional pipeline volumes for 2024, with 2025 guidance for 4–6% physical volume growth.

• Remaining 2024 capital expenditures are estimated at $270–$300 million, focused on RFS IV, NEBC MPS Expansion, and smaller growth projects.

• Debt-to-adjusted EBITDA ratio at 3.6x as of September 30, 2024, expected to exit the year between 3.4x and 3.6x.

• Expects higher interruptible volumes and new contracts to support Q4 performance.