Monday, 20 May 2024


Keyera reports strong Q1 performance, plans for growth By

Key facts about the highly anticipated IPO By

Keyera Corp (KEY.TO) has announced a robust start to 2024, with the first quarter showing significant growth and solid fee-for-service cash flows in all three of its business segments. The Liquids Infrastructure segment outperformed with a record margin, while the Gathering and Processing segment delivered near-record earnings.

The Marketing segment also contributed a substantial margin and is projected to continue its strong performance throughout the year. The company’s financial position remains strong, with net debt to adjusted EBITDA well below its target range. Keyera is focused on reinvesting its excess cash flows into long-term infrastructure projects, with growth opportunities on the horizon, including a new factory expansion and the KAPS Zone for expansion.

The company is also considering share buybacks as part of its commitment to disciplined financial management and shareholder value.

Key Takeaways

  • Keyera achieved a record margin in its Liquids Infrastructure segment and near-record earnings in the Gathering and Processing segment.
  • The Marketing segment is expected to contribute significantly to the year’s earnings.
  • The company’s net debt to adjusted EBITDA ratio is below the targeted range, indicating a strong financial position.
  • Keyera plans to invest in long-term infrastructure projects and is considering share buybacks.
  • Growth opportunities include the Frac II debottleneck, a new factory expansion, and a KAPS Zone for expansion.
  • The company is focused on dividend growth, shareholder value, and the potential for strategic acquisitions.

Company Outlook

  • Keyera anticipates significant free cash flow generation in 2024.
  • The company is exploring growth opportunities in the basin and integrated services for customers.
  • There is an expected increase in oil sands and condensate demand, benefiting the Gathering and Processing business.
  • Keyera is considering hydrogen and ammonia projects, contingent on government policy.
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Bearish Highlights

  • Volume headwinds in the southern region are expected but should recover with prices.
  • The Rimbey gas plant is currently underutilized, operating at about half capacity.

Bullish Highlights

  • Strong demand for iso-octane and premium prices achieved.
  • Potential for growth in natural gas liquids (NGLs) and connectivity between Keyera’s facilities.
  • The company has a strong balance sheet and options for allocating cash, including dividend…

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