AltaGas (ALA) Q3 2024 earnings summary

Executive summary

• Normalized EBITDA rose 17% year-over-year to CAD 294 million in Q3 2024, with normalized EPS up 75% to CAD 0.14, both ahead of expectations.

• Utilities segment outperformed, driven by pension plan settlement, rate base growth, cost management, and modernization investments.

• Midstream segment achieved record global LPG exports of over 128,000 barrels per day to Asia, with double-digit growth in processing, fractionation, and liquids handling.

• Major projects REEF and Pipestone II are progressing on time and on budget, with strong commercial momentum and high contract coverage.

• Strategic focus on Montney infrastructure and data center growth supports long-term value creation.

Financial highlights

• Normalized EBITDA reached CAD 294 million in Q3 2024, a 17% increase year-over-year.

• Normalized EPS was CAD 0.14, up 75% from the prior year.

• Utilities segment normalized EBITDA was CAD 117 million, up 65% year-over-year, driven by pension settlement and new rates.

• Midstream segment normalized EBITDA was CAD 181 million, slightly down from last year, with strong exports offset by lower MVP earnings and one-time costs.

• Q3 2024 revenue was CAD 2,759 million, down from CAD 3,030 million in Q3 2023.

Outlook and guidance

• 2024 normalized EBITDA expected at the upper end of CAD 1.675–1.775 billion; normalized EPS near the midpoint of CAD 2.05–2.25.

• 2024 capital budget remains at CAD 1.3 billion, with 53% allocated to Utilities and 43% to Midstream.

• Anticipates continued strong growth in the Montney region and robust long-term demand from data centers.

• Management targets lower leverage ratios and steady dividend growth.

• Active hedging program in place to de-risk commodity exposure for 2024.