Energy firm Keyera posts decline in Q2 adjusted core profit; raises dividend
Overview
Energy midstream company Keyera Q2 adjusted EBITDA falls to C$252 mln, impacted by acquisition costs
Net earnings for Q2 decline to C$127 mln, reflecting lower Marketing segment contributions
Co raises dividend by 4%, supported by fee-for-service business growth
Outlook
Keyera expects 2025 Marketing segment margin of C$310 mln to C$350 mln
Growth capital expenditures for 2025 lowered to C$275 mln-C$300 mln
Maintenance capital expenditures for 2025 remain at C$70 mln-C$90 mln
Keyera anticipates mid-teens accretion to DCF per share post-acquisition
Result Drivers
FEE-FOR-SERVICE GROWTH - Fee-for-service realized margin increased by 8.4% due to strong performance in Gathering and Processing and Liquids Infrastructure segments
MARKETING DECLINE - Marketing segment's realized margin fell due to lower commodity prices
ACQUISITION IMPACT - Plains Canadian NGL assets acquisition expected to enhance service offerings and shareholder value
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Net Income | C$126.52 mln | ||
Q2 Adjusted EBITDA | C$251.54 mln | ||
Q2 FFO | C$187.12 mln | ||
Q2 Adjusted Free Cash Flow | C$145.82 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the oil & gas refining and marketing peer group is "buy"
Wall Street's median 12-month price target for Keyera Corp is C$51.00, about 16% above its August 6 closing price of C$42.84
The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 19 three months ago
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