Keyera (KEY) Q1 2025 earnings summary

Executive summary

• Net earnings rose to $130 million, up significantly year-over-year, driven by strong Gathering & Processing and near-record Liquids Infrastructure performance.

• Adjusted EBITDA was $298 million, down from $314 million in Q1 2024, reflecting lower Marketing segment contribution.

• Fee-for-service realized margin increased 9% year-over-year to $262 million, supporting sustainable dividend growth.

• Major growth projects sanctioned: KFS Frac III ($500 million, 47,000 bbl/d, in service mid-2028) and KFS Frac II Debottleneck ($85 million, 8,000 bbl/d, online mid-2026), both with strong contractual support.

• Wapiti Gas Plant expected to reach effective capacity in 2026, a year ahead of schedule, with ongoing optimization projects.

Financial highlights

• Revenue reached $1.76 billion, up from $1.52 billion in Q1 2024.

• Distributable cash flow was $190 million ($0.83/share), down from $205 million ($0.90/share) year-over-year.

• Net earnings per share were $0.57 (Q1 2024: $0.31).

• Dividends declared totaled $119 million ($0.52/share), with a payout ratio of 63%.

• Net debt to adjusted EBITDA was 2.0x, below the 2.5–3.0x target range.

Outlook and guidance

• 2025 Marketing segment realized margin expected between $310–$350 million, including a $50 million impact from a seven-week AEF outage.

• Growth capital expenditures forecast at $300–$330 million; maintenance capital at $70–$90 million.

• Cash taxes for 2025 projected at $100–$110 million.

• Targeting 7–8% CAGR in fee-based adjusted EBITDA from 2024 to 2027.

• Average annual growth capital spending from 2026 to 2027 expected at $350–$450 million, to be equity self-funded.