In This Article:
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Adjusted EBITDA: $718 million for Q1 2024.
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2024 Adjusted EBITDA Guidance: Range of $2.625 billion to $2.725 billion.
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Adjusted Free Cash Flow for 2024: Expected to be $1.55 billion, excluding changes in assets and liabilities.
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Capital Allocation: $1.15 billion for common and preferred distributions.
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Growth and Maintenance Capital: Targeted at $375 million and $230 million, respectively, net to PAA.
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Bolt-on Acquisitions: $110 million spent on acquiring an additional 10% in Saddlehorn Pipeline Company LLC and the Mid-Con terminal asset.
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Permian Long-haul Contracting: Extended terms and increased contract volumes, with new rates effective September 2025.
Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Plains GP Holdings LP reported first-quarter results in line with expectations, reflecting progress towards full-year 2024 targets.
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The company reaffirmed its 2024 adjusted EBITDA outlook, maintaining financial guidance and demonstrating stability in its operations.
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Plains GP Holdings LP successfully increased contract volumes and extended the term on certain contracts, enhancing the stability of future revenues.
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The company acquired an additional 10% in the Saddlehorn Pipeline Company LLC and the Mid-Con terminal asset, expected to generate returns above the weighted average cost of capital.
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Plains GP Holdings LP continues to generate significant free cash flow, maintaining a strong financial position and the ability to return capital to investors.
Negative Points
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Despite positive first-quarter results, Plains GP Holdings LP did not increase its 2024 guidance, suggesting potential caution about future uncertainties.
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The company faces challenges with contract rates potentially being lower in future renegotiations, which could impact revenue stability.
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There are ongoing concerns about weather-related impacts and operational disruptions that could affect production and efficiency.
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Market dynamics and external factors such as gas constraints and pipeline capacity issues could pose risks to the company's operational performance.
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While the company is making strategic acquisitions, there is always a risk associated with integrating new assets and achieving projected returns.
Q & A Highlights
Q: Can you discuss why the 2024 guidance was not increased despite a strong Q1 and recent acquisitions? A: Willie Chiang, CEO, explained that it is still early in the year, and while they are confident about their performance, they prefer not to adjust the guidance prematurely but remain cautiously optimistic about meeting their targets.