Q2 2024 Keyera Corp Earnings Call Transcript
Key Points
- Keyera Corp (KEYUF) announced a 4% increase in its annual dividend to $2.8 per share, supported by a conservative payout ratio and a strong balance sheet.
- The company achieved record throughput volumes in the North region, contributing to a $102 million realized margin in the gathering and processing segment.
- The liquids infrastructure segment delivered its second-highest quarter ever with a $133 million realized margin, driven by the ramp-up of KAPS and growing demand for fractionation, storage, and condensate businesses.
- Keyera Corp (KEYUF) raised its marketing segment guidance to a range of $450 million to $480 million of realized margin in 2024, up from the previous guidance of $430 million to $470 million.
- The company maintains a strong financial position with a net debt to adjusted EBITDA ratio of 2 times, below its targeted range of 2.5 to 3 times, allowing for equity self-funding opportunities to enhance shareholder value.
- Net earnings decreased to $142 million from $159 million for the same period last year, primarily due to higher depreciation and interest costs.
- Distributable cash flow decreased to $202 million or $0.88 per share, compared to $207 million or $0.90 per share for the same period in 2023.
- Maintenance capital is expected to increase to a range of $120 million to $140 million, up from $90 million to $110 million, mostly due to increased costs for turnaround activities.
- The company faces potential challenges from a rail strike, which could impact logistics and operations, although they have storage and contingency plans in place.
- Producer curtailments in the South region led to a decline in overall volumes, although the impact was tempered by take-or-pay contracts.
Good morning. My name is Ina, and I will be your conference operator today. At this time, I would like to welcome everyone to Keyera's 2024 second quarter conference call. (Operator Instructions) I would now like to turn the call over to Mr. Dan Cuthbertson, Director of Investor Relations. You may begin.
Thanks and good morning. Joining me today will be Dean Setoguchi, President and CEO; Eileen Marikar, Senior Vice President and CFO; Jamie Urquhart, Senior Vice President and Chief Commercial Officer; and Jarrod Beztilny, Senior Vice President, Operations and Engineering. We will begin with some prepared remarks from Dean and Eileen after which we'll open the call to questions.
I'd like to remind listeners that some of the comments and answers will be given today relate to future events, these forward-looking statements are given as of today's date and reflect events or outcomes that management currently expects.
In addition, we will refer to some non-GAAP financial measures for
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