CALGARY, Alberta – Pembina Pipeline Corporation (NYSE:) (TSX: PPL (NYSE:); NYSE: PBA), a leading provider of energy transportation and power processing services, announced record financial results for the fourth quarter and full year 2023. The company reported full-year profit of $1.776 million and record full-year adjusted EBITDA of $3.824 million, beating the high end of its original 2023 guidance. Fourth-quarter earnings were $698 million on record quarterly adjusted EBITDA of $1,033 million.
The company has entered into long-term agreements with Dow Chemical Canada to supply and transport up to 50,000 barrels of ethane per day to support Dow’s Path2Zero project. Pembina has also signed an additional long-term contract for the recently renewed Nipisi pipeline, with the intention of having the asset fully contracted by the end of 2024.
Pembina Gas Infrastructure has approved a $140 million expansion of the Wapiti plant that is expected to increase processing capacity by 115 million cubic feet per day. Additionally, the estimated cost of the Phase VIII Peace Pipeline expansion was reduced to $430 million.
The Board of Directors declared a first quarter 2024 common stock dividend of $0.6675 per share payable on March 28, 2024 to shareholders of record on March 15, 2024. Pembina maintains a strong balance sheet with proportionately consolidated debt to – adjusted EBITDA multiple as of December 31, 2023, below the company’s target range.
In the fourth quarter, Pembina’s pipeline division’s adjusted EBITDA increased 13 percent to $617 million, driven primarily by higher volumes and toll collections. The real estate division reported a 13 percent increase in adjusted EBITDA to $324 million, driven by higher sales volumes across certain assets. Marketing & New Ventures posted a slight increase in adjusted EBITDA to $173 million.
For the full year, adjusted EBITDA for the Pipelines business grew 5 percent to $2,234 million and adjusted EBITDA for the Industrial Equipment business grew 7 percent to $1,213 million. The Marketing & New Ventures division experienced a 17 percent decline in adjusted EBITDA to $597 million.
Pembina’s total fourth-quarter production volumes increased 2 percent to 3,453 thousand barrels of oil equivalent per day (mboe/d), while full-year volumes decreased slightly by 2 percent to 3,306 million barrels of oil equivalent per day.
Information based on press statement from Pembina Pipeline Corporation.
InvestingAbout Insights
Pembina Pipeline Corporation’s (NYSE: PBA) recent financial performance has been strong, with full-year earnings and record full-year adjusted EBITDA beating 2023 expectations. In light of this, let’s dive into some key indicators and InvestingPro tips that can provide further insight. context for investors assessing a company’s prospects.
InvestingPro Data indicates a market capitalization of $18.92 billion, reflecting the company’s significant presence in the energy sector. Despite the challenging environment, Pembina has maintained a stable P/E ratio of 21.33 over the trailing twelve months as of Q3 2023. This suggests a level of stability in its earnings relative to market valuations. Additionally, the company boasts a dividend yield of 5.71%, which is particularly attractive to income-focused investors, especially since Pembina has maintained its dividend for 14 straight years.
InvestingPro’s tips for Pembina Pipeline Corporation highlight the company’s low price volatility, providing a sense of security to investors who prefer low-risk investments. However, it is important to note that a company’s short-term liabilities exceed its liquid assets, which can cause liquidity problems. On the plus side, analysts are forecasting the company to be profitable this year, in line with the company’s recent financial results, which show profitability over the last twelve months.
For those interested in deeper analysis, InvestingPro offers additional tips on Pembina Pipeline Corporation, which can be found on the InvestingPro Tips for Pembina page. Using coupon code PRONEWS24, investors can receive an additional 10% discount on annual or biennial Pro and Pro+ subscriptions, providing additional information to help make more informed investment decisions. Listed for Pembina are 5 more InvestingPro tips that provide a comprehensive overview of the company’s financial health and market performance.
Investors evaluating Pembina’s recent agreements and expansion plans may find this information particularly valuable as they consider the company’s future earnings streams and growth potential. With a solid dividend payment record and strong balance sheet, Pembina Pipeline Corporation is a worthwhile option for those looking to invest in the energy transportation and mining services sector.
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