AltaGas Earnings Call: Strong Results Amid Challenges

AltaGas Ltd. ((TSE:ALA)) has held its Q4 earnings call. Read on for the main highlights of the call.

AltaGas Ltd. recently held its earnings call, showcasing a strong financial and operational performance for 2024. The company highlighted record safety improvements and successful project advancements, although it acknowledged challenges such as regulatory hurdles and the impacts of U.S. tariffs, which pose areas of concern for the future.

Record Safety Performance

AltaGas reported a remarkable 33% improvement in safety performance in 2024 compared to the previous year, marking the best safety year ever for the company. This achievement underscores AltaGas’s commitment to maintaining a safe working environment and its continuous efforts to enhance operational safety standards.

Strong Financial Performance

The company demonstrated robust financial results, with a 2024 normalized EBITDA of $1.77 billion, reflecting a 12% increase year-over-year. Additionally, the normalized EPS reached $2.18, a 15% rise from the previous year, both figures landing at the top-end of guidance ranges. These results highlight AltaGas’s effective financial management and strategic execution.

Record Global Export Volumes

AltaGas achieved record global export volumes, exporting over 122,000 barrels per day of LPG to Asia in 2024. This milestone reflects strong customer demand and the company’s successful expansion into international markets, further solidifying its global presence.

Successful Midstream and Utilities Investments

Significant progress was made on the Pipestone 2 and REEF projects, with both remaining on time and on budget. Additionally, AltaGas’s utilities investments led to the addition of over 12,000 new customers, showcasing the company’s commitment to growth and infrastructure development.

Leverage and Financial Flexibility

AltaGas continued to reduce its leverage, enhancing financial flexibility to execute strategic plans. The reduction in adjusted net debt by approximately $460 million year-over-year is a testament to the company’s focus on maintaining a strong balance sheet.

Regulatory Challenges

The company faces ongoing regulatory challenges, particularly the need for weather normalization adjustments in rate cases in D.C. These challenges require strategic navigation to ensure compliance and operational efficiency.

U.S. Tariffs Impact

Uncertainty surrounding U.S. tariffs on Canadian energy presents challenges for AltaGas, potentially impacting cash flows of upstream customers. This issue remains a critical area of concern for the company’s future operations.

Challenges in MVP Contributions

AltaGas experienced lower contributions from the Mountain Valley Pipeline (MVP) due to the recording of equity earnings compared to AFUDC recorded in 2023. This change affects the financial contributions from this asset.

Weather Impact on Utilities

Warm weather in D.C. and Michigan, regions without weather normalization, negatively impacted utilities performance. This environmental factor highlights the need for strategic adjustments in utility operations.

Forward-Looking Guidance

During the earnings call, AltaGas provided robust guidance for 2025, reaffirming its normalized EPS range between $2.10 to $2.30 and normalized EBITDA between $1.775 billion to $1.875 billion. The company emphasized its substantial investment in the utilities business and the continued progress of major midstream projects, positioning itself for sustained growth.

In summary, AltaGas’s earnings call reflected a positive sentiment with strong financial and operational achievements, despite facing regulatory and tariff-related challenges. The company’s strategic investments and focus on safety and financial flexibility position it well for future growth, as highlighted in its forward-looking guidance.