CALGARY, Alberta—Pembina Pipeline Corporation (“Pembina” or the “Company”) (TSX: PPL; NYSE: PBA) has released its financial and operational results for the third quarter of 2024.
Highlights
Quarterly Results: Pembina reported Q3 earnings of $385 million, adjusted EBITDA of $1.019 billion, and adjusted cash flow from operating activities of $724 million.
2024 Guidance Update: The Company has refined its adjusted EBITDA guidance range to $4.225 billion to $4.325 billion (previously $4.2 billion to $4.35 billion).
Business Developments:
- As of August 1, 2024, Pembina acquired a 14.6% interest in Aux Sable’s U.S. operations, consolidating its ownership of all Aux Sable assets.
- Pembina Gas Infrastructure Inc. (PGI) announced a $420 million transaction with Whitecap Resources Inc. for a 50% interest in Whitecap’s Kaybob Complex, alongside an obligation for future infrastructure funding. PGI also partnered with Veren Inc. to acquire $400 million in assets in the Gold Creek and Karr areas and to develop new infrastructure in the Gold Creek area.
Dividend Announcement: Pembina’s board declared a fourth-quarter cash dividend of $0.69 per share, payable on December 31, 2024, to shareholders of record as of December 16, 2024.
Balance Sheet Strength: As of September 30, 2024, Pembina’s debt-to-adjusted EBITDA ratio was 3.6 times, reflecting a strong balance sheet and integrating contributions from recent acquisitions.
Financial & Operational Performance
Adjusted EBITDA by Segment
- Pipelines: Adjusted EBITDA of $593 million was consistent with the previous year, supported by increased Alliance ownership and higher seasonal demand, partially offset by reduced Cochin Pipeline tolls and volumes due to contracting changes and increased maintenance costs.
- Facilities: Adjusted EBITDA rose 2% to $324 million, largely driven by contributions from Aux Sable and a gain from the previous year.
- Marketing & New Ventures: Adjusted EBITDA remained steady at $159 million, supported by increased ownership in Aux Sable and higher NGL margins, though offset by an unplanned outage at Aux Sable and lower derivative gains.
- Corporate: Adjusted EBITDA was negative $57 million, reflecting increased long-term incentive costs driven by share price gains, offset by reduced consulting expenses.
Earnings Performance
Third-quarter earnings reached $385 million, an 11% increase from the prior year.
- Pipelines: Earnings were $433 million, down 1% due to increased depreciation from the Alliance acquisition and factors impacting adjusted EBITDA.
- Facilities: Earnings declined 27% to $131 million due to unrealized losses on interest rate derivatives and higher depreciation post-Aux Sable acquisition.
- Marketing & New Ventures: Earnings surged by $129 million to $125 million, benefiting from unrealized gains on NGL and crude-oil derivatives and a storage insurance recovery.
- Corporate: Earnings were impacted by higher finance costs linked to debt from the Alliance acquisition.
Cash Flow Highlights
Pembina’s Q3 cash flow from operating activities rose 43% year-over-year to $922 million, driven by stronger operating performance, favorable working capital shifts, and reduced taxes. Adjusted cash flow from operations grew 10% to $724 million, driven by higher operating results and lower tax expenses, though offset by increased share-based payment costs.
Summary
Pembina’s Q3 2024 performance reflects solid financial and operational resilience, with earnings growth, strengthened cash flow, and strategic investments in expanding its infrastructure and market presence.