TC Energy (TRP) Q2 2024 earnings summary

Executive summary

• Achieved 10% year-over-year growth in comparable EBITDA and 35% growth in segmented earnings for the first half of 2024, driven by strong operational performance and strategic initiatives.

• Net income attributable to common shares was $963 million ($0.93 per share) for Q2 2024, up from $250 million ($0.24 per share) in Q2 2023; comparable earnings were $978 million ($0.94 per share).

• Advanced major projects, including over 98% completion of the Southeast Gateway pipeline offshore installation, and placed $1.2 billion of natural gas capacity projects in service year-to-date.

• Announced a $1.0 billion Indigenous equity ownership agreement for NGTL and Foothills Systems and received shareholder approval for the spinoff of the Liquids Pipelines business, expected to close in early Q4 2024.

• Progressed $2.6 billion in asset divestitures toward a $3 billion target, including PNGTS and a minority interest in NGTL and Foothills.

Financial highlights

• Q2 2024 comparable EBITDA was $2.7 billion, up from $2.5 billion in Q2 2023; comparable earnings were $978 million ($0.94/share); net income attributable to common shares was $963 million ($0.93/share).

• Revenues for Q2 2024 were $4.1 billion, up from $3.8 billion in Q2 2023; six-month revenues reached $8.3 billion.

• Net cash from operations was $1.7 billion for Q2 2024; comparable funds from operations were $1.8 billion.

• Capital spending for Q2 2024 was $1.6 billion, down from $3.0 billion in Q2 2023.

• Declared a quarterly dividend of $0.96 per share for Q3 2024.

Outlook and guidance

• Reaffirmed 2024 comparable EBITDA guidance of $11.2–$11.5 billion.

• Capital expenditures for 2024 anticipated at the low end of $8.0–$8.5 billion (net basis).

• On track to place approximately $7 billion of projects into service in 2024 and $9 billion in 2025.

• Targeting year-end debt-to-EBITDA of 4.75x and maintaining $6–$7 billion annual net capex limit.

• Comparable EPS for 2024 expected to be lower than 2023 due to higher non-controlling interest income, despite higher EBITDA and AFUDC.