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Pembina Pipeline reports record annual adjusted EBITDA

EditorNatashya Angelica
Published 02/22/2024, 06:21 PM
© Reuters.

CALGARY, Alberta - Pembina Pipeline (NYSE:PBA) Corporation (TSX: PPL (NYSE:PPL); NYSE: PBA), a leading energy transportation and midstream service provider, announced record financial results for the fourth quarter and full year of 2023. The company reported full-year earnings of $1,776 million and a record annual adjusted EBITDA of $3,824 million, surpassing the upper end of its original guidance for 2023. The fourth quarter earnings amounted to $698 million with a record quarterly adjusted EBITDA of $1,033 million.

The company has entered into long-term agreements with Dow Chemical Canada to supply and transport up to 50,000 barrels per day of ethane to support Dow's Path2Zero Project. Pembina also signed an additional long-term contract for the recently reactivated Nipisi Pipeline, with expectations to fully contract the asset by the end of 2024.

Pembina Gas Infrastructure approved a $140 million expansion of the Wapiti Plant, expected to increase natural gas processing capacity by 115 million cubic feet per day. Furthermore, the estimated cost for the Phase VIII Peace Pipeline Expansion has been reduced to $430 million.

The board of directors declared a first-quarter 2024 common share cash dividend of $0.6675 per share, payable on March 28, 2024, to shareholders of record on March 15, 2024. Pembina maintains a strong balance sheet, with a proportionately consolidated debt-to-adjusted EBITDA ratio of 3.3 times as of December 31, 2023, below the company's targeted range.

In the fourth quarter, Pembina's adjusted EBITDA from the Pipelines division increased by 13 percent to $617 million, primarily due to higher volumes and tolls. The Facilities division reported a 13 percent increase in adjusted EBITDA to $324 million, attributed to higher volumes from certain assets. The Marketing & New Ventures division saw a slight increase in adjusted EBITDA to $173 million.

For the full year, the Pipelines division's adjusted EBITDA rose by 5 percent to $2,234 million, while the Facilities division's adjusted EBITDA grew by 7 percent to $1,213 million. The Marketing & New Ventures division experienced a 17 percent decrease in adjusted EBITDA to $597 million.

Pembina's total volumes for the fourth quarter increased by 2 percent to 3,453 thousand barrels of oil equivalent per day (mboe/d), and full-year volumes slightly decreased by 2 percent to 3,306 mboe/d.

The information is based on a press release statement from Pembina Pipeline Corporation.

InvestingPro Insights

Pembina Pipeline Corporation's (NYSE: PBA) recent financial performance has been robust, with full-year earnings and a record annual adjusted EBITDA that exceeded expectations for 2023. In light of this, let's delve into some key metrics and InvestingPro Tips that can provide further context for investors evaluating the company's prospects.

InvestingPro Data highlights a market capitalization of $18.92 billion, reflecting the company's significant presence in the energy sector. Despite a challenging environment, Pembina has maintained a steady P/E ratio of 21.33 over the last twelve months as of Q3 2023. This suggests a level of stability in its earnings relative to the market valuation. Additionally, the company boasts a dividend yield of 5.71%, which is particularly attractive to income-focused investors, especially considering Pembina has maintained dividend payments for 14 consecutive years.

InvestingPro Tips for Pembina Pipeline Corporation underline the company's low price volatility, providing a sense of security for investors who prefer lower-risk investments. However, it's important to note that the company's short-term obligations exceed its liquid assets, which could present liquidity concerns. On a positive note, analysts predict the company will be profitable this year, aligning with the company's recent financial results that demonstrate profitability over the last twelve months.

For those interested in a deeper analysis, InvestingPro offers additional tips on Pembina Pipeline Corporation, which can be accessed at InvestingPro Tips for Pembina. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further insights that can aid in making more informed investment decisions. There are 5 more InvestingPro Tips listed for Pembina, providing a comprehensive overview of the company's financial health and market performance.

Investors evaluating Pembina's recent agreements and expansion plans may find these insights particularly valuable as they consider the company's future revenue streams and growth potential. With a solid track record of dividend payments and a strong balance sheet, Pembina Pipeline Corporation stands as a noteworthy option for those looking to invest in the energy transportation and midstream services sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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