Pembina(PBA) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported Q4 earnings of CAD 489 million, representing a 15% decrease year-over-year [19] - Adjusted EBITDA for Q4 was approximately CAD 1.075 billion, a CAD 179 million or 14% decrease compared to the same period last year [16] - Full year earnings reached CAD 1.694 billion, with Adjusted EBITDA of CAD 4.289 billion and adjusted cash flow from operating activities of CAD 2.854 billion or CAD 4.91 per share [5][21] Business Line Data and Key Metrics Changes - Pipelines and facilities divisions achieved total volumes of 3.7 million barrels of oil equivalent per day in Q4, a 1% increase year-over-year [20] - The marketing and new ventures segment faced challenges due to narrower NGL frac spreads, impacting overall performance [18] - The company renewed contracts totaling over 200,000 barrels per day of conventional pipeline transportation capacity, including significant recontracting on the Peace Pipeline system [9] Market Data and Key Metrics Changes - The company noted higher volumes on the Peace Pipeline system and increased demand for condensate and NGL transportation due to growing production in the Western Canadian Sedimentary Basin [10] - The company is proceeding with expansions to meet rising transportation demands, including the Fox Creek to Mayo expansion, which will add approximately 70,000 barrels per day of capacity [10] Company Strategy and Development Direction - Pembina is focused on providing safe, reliable, and cost-effective energy infrastructure solutions while capturing incremental new volumes in the Western Canadian Sedimentary Basin [25] - The company is advancing strategic projects, including the Cedar LNG project and various pipeline expansions, to enhance its long-term competitive positioning [6][12] - Pembina aims to ensure long-term resilience through extensive recontracting and infrastructure investments supported by long-term take-or-pay agreements [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to meet customer demands and capture growth opportunities despite market volatility [25] - The company anticipates a peak investment year in 2026 for the Cedar LNG facility, with expectations of returning to a lower debt-to-Adjusted EBITDA ratio post-2026 [23][24] - Management highlighted the importance of project execution and collaboration with local communities to ensure successful project delivery [32] Other Important Information - The company plans to hold a webcast and conference call on April 7th to provide a general business update and long-term outlook [14] - Pembina is making significant progress on the Greenlight Electricity Centre, targeting a final investment decision in Q2 2026 [63] Q&A Session Summary Question: Details on the decision not to pursue the full Taylor-to-Gordondale Expansion - Management explained that the decision was driven by the need for a capital-light solution and the focus on project execution rather than a schedule-driven approach [28][34] Question: Update on marketing outlook given recent pricing changes - Management indicated that while there were headwinds at the start of the year, the outlook for the remainder of the year is improving, and they expect to be slightly ahead of the midpoint on marketing guidance [36][39] Question: Economics of the Tourmaline contract extension - Management confirmed that the extension was primarily a renewal of existing business, with strong netbacks due to liquids production [47][68] Question: Update on the Alliance short-haul expansion project - Management stated that strong demand continues in the Alberta Industrial Heartland area, with an announcement expected shortly [67] Question: Timing of the April 7th presentation - Management indicated that the timing is to provide more granularity on growth opportunities and ensure clarity on project developments [72][73]