Keyera Swings to Profit in Q4

Keyera Corp. (TSE: KEY), one of Canada’s largest midstream oil and gas operators, swung from a loss to a profit in the fourth quarter.

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Key Results

Keyera achieved Q4 adjusted EBITDA of C$294 million, up from C$168 million, and C$956 million for the full-year 2021, up from C$874 million.

This full-year result represents a year-over-year increase of 9% from 2020, largely driven by a general recovery in industry activity and a solid performance in all three business segments.

Net income was C$90 million for the fourth quarter and C$324 million for the full year 2021, compared to a loss of C$75 million and profit of C$62 million for the same periods in 2020. The year-over-year increase is due to a higher operating margin and lower impairment charges in 2021.

CEO Commentary

Keyera president and CEO Dean Setoguchi said, “Reflecting on my first year as CEO, I’m proud of the results we delivered, which reinforce the effectiveness of our strategy and our ability to create value for our customers and shareholders. These efforts, supported by higher commodity prices and a more favourable industry outlook, drove excellent results in all three of our business segments during 2021.”

Wall Street’s Take

On February 14, Scotiabank analyst Robert Hope kept a Buy rating on KEY and C$37 price target. This implies 20.6% upside potential.

The rest of the Street is cautiously optimistic about KEY, with a Moderate Buy consensus rating based on three Buys and two Holds. The average Keyera price target of C$34.60 implies 12.8% upside potential to current levels.

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