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• Normalized EBITDA: $294 million in Q3, representing 17% growth year-over-year.

• Normalized EPS: $0.14, nearly double from the previous year.

• Global Export Volumes: Record of more than 128,000 barrels per day of LPGs exported to Asia.

• Midstream Segment Normalized EBITDA: $181 million, consistent with last year.

• Utilities Segment Normalized EBITDA: $117 million, a 65% increase from Q3 2023.

• Invested Capital in Utilities: $187 million during the quarter.

• Hybrid Notes Issuance: $900 million with an effective interest rate of 6.9% over 10 years.

• 2024 Capital Budget: Unchanged at $1.3 billion.

• Warning! GuruFocus has detected 12 Warning Signs with ATGFF.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• AltaGas Ltd (ATGFF) reported a 17% year-over-year growth in normalized EBITDA, reaching $294 million in Q3.

• The company achieved record global export volumes, exporting over 128,000 barrels per day of LPGs to Asia.

• Strong performance in the utilities segment was driven by capital investments and active cost management, despite warmer weather conditions.

• Construction progress on major projects like Reef and Pipestone 2 is on track, with significant portions of capital costs locked in fixed-price EPC contracts.

• AltaGas Ltd (ATGFF) is actively pursuing long-term growth opportunities, including data center energy demands and regulatory filings to support system modernization.

Negative Points

• The company faced challenges from Alberta wildfires and potential national rail strikes, impacting operations and causing higher onetime operating costs.

• Despite strong export volumes, lower export margins and higher LTIP costs due to rising share prices affected financial performance.

• Mild weather in key regions like D.C. and Michigan posed a headwind for the utilities segment, impacting heating degree days.

• The company is still in the early phases of price discovery for its non-core Mountain Valley Pipeline stake, which could affect balance sheet improvements.

• There is uncertainty regarding the approval of weather variance accounts in D.C., which could impact future financial stability.

Q & A Highlights

Q: When can we expect contracts to be secured for the Reef project, and how does this affect the decision on Reef Phase II? A: Vern D. Yu, President and CEO, stated that they are optimistic about finalizing tolling contracts in the next 3-4 months. The decision on Reef Phase II will depend on these contracts. A small expansion could proceed with minimal permitting, but a larger expansion would require more.