AltaGas Announces Third Quarter 2019 Results
THIRD QUARTER RESULTS SAW STRONG PERFORMANCE FROM THE MIDSTREAM BUSINESS DRIVEN BY RIPET AND THE ADVANCEMENT OF ITS ENERGY EXPORT STRATEGY
On October 30, AltaGas reported third quarter 2019 financial results which represents the first consolidated quarter-over-quarter results including the acquisition of WGL Holdings, Inc. AltaGas also reaffirmed its 2019 outlook, and provided an update on its business and near-term priorities, which remain on track.
Normalized EBITDA(1) was $178 million, compared to $226 million in the prior year, with strong contributions from the Ridley Island Propane Export Terminal (RIPET) ($37 million) being more than offset by EBITDA lost due to asset sales ($93 million) and a one-time adjustment related to the Hearing Examiner's report in Virginia pertaining primarily to the return of excess deferred taxes ($30 million).
Excluding the impact of the Virginia Hearing Examiner’s report and lost EBITDA from asset sales, normalized EBITDA would have increased by approximately $75 million for the quarter as compared to the same quarter last year.
Net income applicable to common shares was $22 million ($0.08 per share) in the third quarter compared to a loss of $726 million ($2.78 per share) in the prior year. Normalized net loss(1) was $58 million ($0.21 per share) in the third quarter compared to normalized net loss of $17 million ($0.07 per share) in the prior year.
Normalized funds from operations (FFO)(1) were $67 million, compared to $117 million in the third quarter of 2018. Excluding the impact of the Virginia Hearing Examiner’s report and lost FFO from asset sales, FFO would have increased by approximately $39 million for the quarter as compared to the same quarter last year.
The Company exceeded its 2019 asset monetization program target of $1.5 - $2 billion, with $2.2 billion in asset sales announced year-to-date.
2019 outlook remains unchanged with expected normalized EBITDA in the range of $1.2 - $1.3 billion and normalized FFO of $850 - $950 million.
The 2019 de-leveraging target of $3 billion remains in line with expectations. At quarter end, net debt(1) had been reduced by $2.4 billion year-to-date.
The Midstream segment delivered strong results with normalized EBITDA growing by approximately 95 percent to $127 million compared to $65 million in the prior year. The first full quarter of operations at RIPET contributed approximately $37 million of normalized EBITDA. During the quarter RIPET averaged two ships exported per month to Asian markets. Volumes delivered to RIPET averaged approximately 40,000 bbl/d.
Subsequent to quarter end, AltaGas’ subsidiary Washington Gas, received an Approved Rate Case Settlement Agreement in Maryland, approving an increase in annual revenues of US$27 million with a return on equity of 9.7 percent. These rates became effective October 15th.
Building Upon the Momentum in Midstream
Marking the first full quarter of operations, RIPET contributed $37 million of EBITDA in the third quarter of 2019 and received approximately 40,000 bbl/d for delivery to Asian markets, averaging two ships per month. Third quarter EBITDA from RIPET benefited from a higher average FEI-Mt. Belvieu hedge rate of US$14 per barrel that included second quarter supply hedges that were rolled forward to the third quarter. The resulting impact to third quarter EBITDA is a one-time benefit of approximately $5 million. As the cornerstone asset of our Midstream business, RIPET has extended our integrated value chain in northeast British Columbia, attracting additional volumes to our system, providing strong netbacks, as well as advancing future growth across our platform.
“RIPET has been successful in capturing incremental value for Canadian propane in international markets - a win-win for our producers and AltaGas. Our focus now is execution at the terminal to gain scale and efficiencies that will allow us to grow our export capabilities by further increasing capacity.”
- Randy Crawford, President and Chief Executive Officer
Conference Call and Webcast Details
For more on our third quarter performance, read our full news release or join our conference call and webcast.
October 30, 2019
8:00 a.m. MT (10:00 a.m. ET)
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(1) Non-GAAP measure; see discussion in the advisories of this news release and reconciliation to US GAAP financial measures shown in AltaGas’ Management's Discussion and Analysis (MD&A) as at and for the period ended September 30, 2019, which is available on www.sedar.com.
Webcast and Conference Call Presenters
Randy Crawford, our President and Chief Executive Officer, summarizes the strategic and operational progress we achieved in the third quarter of 2019.
President and Chief Executive Officer
Our Executive Vice President and Chief Financial Officer, James Harbilas, provides a detailed review of our third quarter financial performance.
D. James Harbilas
Executive Vice President and Chief Financial Officer
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