DT Midstream(DTM) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2025, the company reported adjusted EBITDA of $280 million, an increase of $45 million from the previous quarter [11] - The pipeline segment results were $39 million higher than Q4 2024, reflecting a full quarter contribution from acquired interstate pipelines [11] - Gathering segment results increased by $6 million compared to Q4 2024, driven by lower overall expenses and growing volumes in the Haynesville [11] Business Line Data and Key Metrics Changes - Total gathering volumes in the Haynesville averaged 1.67 Bcf per day, an increase from the previous quarter due to new volumes and the return of offline production [11] - In the Northeast, volumes averaged 1.3 Bcf per day, a decrease from the previous quarter due to timing of producer activity [12] Market Data and Key Metrics Changes - The first quarter of 2025 experienced significant market volatility, with natural gas prices rising due to cold weather in January, followed by a decline as markets adjusted to tariff announcements [6] - Total U.S. natural gas supply and demand are expected to grow by approximately 19 Bcf per day through 2030, primarily driven by LNG exports and utility-scale power generation [8] Company Strategy and Development Direction - The company is focused on executing a $2.3 billion organic growth project backlog and integrating newly acquired interstate pipelines [5] - The company remains bullish about the long-term outlook for natural gas infrastructure, supported by growing demand from LNG exports and utility-scale power generation [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in reaffirming 2025 and 2026 adjusted EBITDA guidance, citing a durable contract structure and minimal commodity exposure [7] - The company highlighted the positive political and regulatory support for natural gas infrastructure, recognizing the need for streamlined processes to build necessary infrastructure [9] Other Important Information - The company announced a first-quarter dividend of $0.82 per share, unchanged from the prior quarter, with a commitment to grow the dividend by 5% to 7% per year [13] - The company is currently investment grade with Fitch ratings and on a positive outlook with Moody's and S&P [13] Q&A Session Summary Question: Gathering volumes in Q1 - Management noted that the uptick in Haynesville volumes aligns with large public producers' activity, while private producers have also become more active [20] Question: Update on data center projects - Management confirmed ongoing advanced commercial conversations for data center power demand and utility-scale power generation projects [24] Question: Outlook on Millennium project - Management indicated strong interest in incremental capacity and noted that the Millennium pipeline is well-positioned to meet market demands [32] Question: Local and state-level energy infrastructure sentiment - Management observed a shift in sentiment among utilities and stakeholders, recognizing the need for reliable energy supply [40] Question: LNG demand and Woodside FID - Management expressed optimism about expansion opportunities stemming from Woodside's FID, which includes a header system connected to the company's assets [44] Question: Backlog and CapEx guidance - Management reassured that the backlog is growing and highlighted several projects progressing towards FID [88] Question: Impact of China tariffs on propane prices - Management clarified that the company has minimal exposure to the wet side of the Marcellus and views potential ethane rejection as an opportunity rather than a risk [96][98] Question: Confidence in navigating macro uncertainty - Management emphasized the durability of the portfolio, with no commodity exposure and a strong balance sheet, allowing confidence in meeting 2025 and 2026 goals [104][106] Question: Data center demand and utility-scale generation - Management reported robust underlying demand for both site-specific and utility-scale power generation, with ongoing projects advancing towards commercialization [112][114]