AltaGas (ALA) Q2 2024 earnings summary

Executive summary

• Normalized EBITDA reached $295 million in Q2 2024, up 23% year-over-year, with normalized EPS doubling to $0.14 per share, both modestly ahead of expectations.

• Record global/LPG export volumes exceeded 123,000 barrels per day, with strong year-over-year growth and robust demand in Asia.

• Utilities delivered stable earnings growth, supported by cost management, modernization, and rate-based investments, despite warmer weather.

• Major midstream projects, including REEF and Pipestone II, are progressing on schedule and budget, with significant fixed-price EPC contracts executed.

• The Mountain Valley Pipeline (MVP) was completed and placed into service in June 2024, with monetization efforts underway.

Financial highlights

• Q2 2024 normalized EBITDA: $295 million, up 23% year-over-year; normalized EPS: $0.14, double the prior year.

• Revenue was $2.78 billion, up from $2.63 billion year-over-year.

• Utilities segment Q2 normalized EBITDA: $122 million, up 20% year-over-year; Midstream segment Q2 normalized EBITDA: $175 million, up 31% year-over-year.

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

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

Outlook and guidance

• 2024 guidance reaffirmed: normalized EPS of $2.05–$2.25 and normalized EBITDA of $1.675–$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.

• Systematic hedging for 2025–2026 underway; 87% hedged for global exports and 86% for frac-exposed barrels for 2024.

• Asset sales, including a potential sale of the MVP pipeline stake, are being considered to accelerate deleveraging.