Pembina(US:PBA)2023-02-24 17:02Financial Data and Key Metrics Changes - Pembina reported fourth quarter adjusted EBITDA of $925 million, a decrease of $45 million or 5% compared to the same period last year [22] - Full year adjusted EBITDA reached a record $3.746 billion, which was 9% higher than in 2021 [34] - Earnings for the fourth quarter were $243 million, representing a $163 million or 204% increase over the same period last year [33] - Cash flow from operating activities for the full year was $2.93 billion, an 11% increase compared to 2021 [34] Business Line Data and Key Metrics Changes - The Marketing & New Ventures business experienced lower margins on NGL sales, partially offset by higher margins on crude oil sales [22] - Total volumes for the fourth quarter were 3.392 million BOE per day, a decrease of approximately 1% year-over-year, primarily due to declines in the Pipelines and Facilities divisions [23] - The company successfully secured incremental volumes through fee-for-service firm contracts with existing customers at key facilities [19] Market Data and Key Metrics Changes - The company noted that the existing facility is highly utilized, necessitating the expansion of RFS IV to meet customer demand [21] - The Northern Pipeline has resumed service at reduced operating pressure, with limited capacity contingent upon integrity assessments [36] Company Strategy and Development Direction - Pembina's strategy focuses on sustaining, decarbonizing, and enhancing its business while investing in energy transition projects [44][74] - The company aims to transform and export products to meet global demand, with a focus on higher-margin products from the Western Canadian Sedimentary Basin [45] - Pembina is committed to executing its strategy within its financial guardrails, ensuring solid per-share growth and exceptional returns to investors [77] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in the Western Canadian Sedimentary Basin, supported by major third-party egress projects [69] - The company reiterated its 2023 adjusted EBITDA guidance range of $3.5 billion to $3.8 billion, reflecting a 5% increase in contributions from its fee-based business [35] - Management acknowledged ongoing economic and geopolitical uncertainties but remains confident in the resilience of its core business [138] Other Important Information - Pembina announced a capital program of approximately $800 million for 2023, reflecting incremental spending related to new revenue-generating infrastructure [67] - The company raised its common share dividend by 3.6% and repurchased $350 million in common shares [64] Q&A Session Summary Question: What is the outlook for marketing in the current environment? - Management indicated that marketing results are tracking slightly ahead of budget due to favorable market conditions [51] Question: Does Pembina have the in-house talent to execute on decarbonization? - Management confirmed that they are building in-house expertise while also considering joint ventures and acquisitions to accelerate execution [90] Question: What is the expected return on capital for RFS IV? - Management stated that RFS IV is expected to compete similarly to previously sanctioned projects, benefiting from existing infrastructure [140] Question: How does Pembina plan to manage construction cost risks? - Management is evaluating options for a lump sum EPC contract to mitigate risks associated with construction costs [103] Question: What is the company's strategy regarding energy transition projects? - Management views energy transition projects as opportunities and is focused on leveraging its existing capabilities to participate in these new markets [98]