Pembina Pipeline (PPL) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 adjusted EBITDA of $1,091 million (CAD 1.091 billion), up 33% year-over-year, and net income of $479 million, driven by the Alliance/Aux Sable acquisition and strong asset performance.

• Closed the Alliance/Aux Sable acquisition, fully consolidating Aux Sable assets and increasing exposure to lighter hydrocarbons.

• Announced positive final investment decision on the Cedar LNG Project, a 3.3 mtpa floating LNG facility with an estimated cost of US$4 billion, targeting in-service by late 2028.

• Completed Phase VIII Peace Pipeline expansion, finalizing a decade-long, $4 billion expansion program and supporting increased transportation capacity.

• PGI-Whitecap transaction includes acquisition of 50% interest in Kaybob Complex and new long-term take-or-pay agreements.

Financial highlights

• Q2 2024 revenue was $1,855 million, up $433 million year-over-year; adjusted EBITDA was $1,091 million, up $268 million; net income was $479 million, up $116 million.

• Adjusted cash flow from operating activities reached $837 million ($1.44 per share), up $231 million year-over-year.

• Capital expenditures for Q2 2024 were $265 million, primarily for pipeline expansions and Redwater projects.

• Pipeline volumes rose 11% to 2,716 mboe/d; facilities volumes increased 14% to 855 mboe/d; NGL sales volumes up 34%.

• Marketing benefited from higher NGL margins and volumes, offset by realized losses on NGL-based derivatives.

Outlook and guidance

• Raised 2024 adjusted EBITDA guidance to $4.20–$4.35 billion, reflecting higher NGL marketing, incremental Aux Sable contribution, and lower corporate costs.

• Revised 2024 capital investment program to $1.3 billion, including $1.0 billion in capital expenditures and $0.3 billion in equity contributions.

• Future capital expenditures for the remainder of 2024 are estimated at $525–$575 million, focused on RFS IV, NEBC MPS Expansion, and smaller growth projects.

• Capital program expected to be funded by operating cash flow net of dividends, maintaining a strong balance sheet.

• No further equity contributions to Cedar LNG expected in 2024.