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Highlights

  • Keyera Corp. reported a 15% revenue decline in Q1 2024 due to lower ethane revenues
  • The company claims to be well-positioned to internally finance future growth opportunities
  • After NGL contracting, the marketing segment expects a realised margin of CAD 430-470 million

Keyera Corp. (TSX: KEY) is a midstream energy company based in Alberta, Canada. The company maintains interests in approximately twelve operational gas plants and manages a network of over 4,000 kilometers of pipelines. It has a market capitalization of CAD 8.91 billion.

Keyera Corp. reported a 15% decline in revenue in Q1 2024 compared to the previous corresponding period (pcp), primarily attributed to reduced ethane revenues from the Rimbey gas plant. The company recorded a lower operating profit of CAD 283.0 million, reflecting the impact of decreased revenue. Earnings before tax totaled CAD 92.3 million in the quarter, down from CAD 178.3 million in pcp. It was driven by lower operating profit as well as increased finance and depreciation costs. Consequently, the company's net profit for the quarter stood at CAD 70.9 million, down from CAD 137.7 million in pcp, reflecting these factors.

In Q1 2024, the company demonstrated a significant increase in adjusted EBITDA compared to Q1 2023, marking a notable positive development. Additionally, it showed substantial growth in total dividends declared and cash flow from operations, underscoring its resilience and flexibility in operations.

Recent business update

At the close of Q1 2024, the company achieved a net debt-to-adjusted EBITDA ratio of 2.2 times, which fell below its targeted range of 2.5 to 3.0 times. This places the company in a strong position to internally finance forthcoming growth opportunities when they are ready to be approved.

Company outlook

After finalizing the NGL contracting season, the marketing segment anticipates a 2024 realised margin ranging from CAD 430 million to CAD 470 million, up from the previous base guidance of CAD 310 million to CAD 350 million.

Top 10 Shareholders

The top ten shareholders of Keyera Corp. together form around 6.54% of the total shareholding in the company. M&G Investment Management Ltd. holds the maximum stake in the company at around 6.82% followed by RBC Global Asset Management Inc., which holds around 6.78% of the total stake.

Stock performance

KEY's stock has shown gains of approximately 7.66% in the past month and about 10.38% over the last three months. Furthermore, it is currently trading above the average of its 52-week high of CAD 38.98 and 52-week low of CAD 30.08.

 

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 22, 2024. The reference data in this report has been partly sourced from EODHD/Others.