AltaGas Ltd. press release

ALTAGAS REPORTS RECORD SECOND QUARTER RESULTS

2026-07-30

TSX - Toronto Stock Exchange · Natural Gas · Natural Gas Liquids · Oil · Sulfur · Canada · Corporate Finance

Canada NewsWire

Strong Year-to-Date Performance Drives 2026 Guidance Increase

CALGARY, AB, July 30, 2026/CNW/ -- AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) reported second quarter 2026 financial results and provides an update on its 2026 guidance, operations, growth initiatives and corporate developments.

Second Quarter Highlights

(all financial figures are unaudited and in Canadian dollars unless otherwise noted)

Financial Highlights

Normalized EBITDA1was $391 million in the second quarter of 2026, compared to the $342 million recorded in the second quarter of 2025. Income before income taxes was $383 million in the second quarter of 2026, an increase from $226 million in the second quarter of 2025.

Normalized EBITDA growth was primarily driven by increased global export volumes and margins, Pipestone II contributions, Utilities pipe modernization investments and higher retail margins in Utilities.

Normalized EPS1 was $0.31 in the second quarter of 2026, compared to $0.27 in the second quarter of 2025, while GAAP EPS2was $0.92 in the second quarter of 2026 compared to $0.59 in the second quarter of 2025.

Guidance and Balance Sheet Update

AltaGas has increased its 2026 guidance, raising normalized EBITDA by four percent to a new range of $2.0 billion–$2.1 billion and normalized EPS by six percent to a range of $2.35–$2.60. The increase reflects strong performance year-to-date and a constructive outlook for both segments for the balance of the year.

Adjusted net debt to normalized EBITDA1exited the quarter at 4.4x on a trailing basis, including 50 percent debt treatment on subordinated hybrids and preferred shares, below the low-end of AltaGas' target leverage range.

AltaGas is increasing its 2026 capital budget from $1.7 billion to $1.8 billion, reflecting higher capital expenditures for the construction of the Ridley Island Energy Export Facility ("REEF") and positive final investment decisions ("FIDs") on two Northeast British Columbia ("NEBC") growth projects.

Operational Highlights

AltaGas exported a record 144,420 Bbl/d of liquid petroleum gases ("LPG") to Asia across 23 Very Large Gas Carriers ("VLGCs"), a 13 percent year-over-year increase.

The Company continues to execute its 2026 Accelerated Replacement Programs ("ARP") focused on long-term safety and reliability, deploying over $200 million of capital and replacing 21 miles of pipe year-to-date.

Business Development and Growth

AltaGas continues to focus on long-term partnerships that leverage shared infrastructure. In the second quarter, AltaGas entered a new agreement with Tourmaline Oil Corp. ("Tourmaline") to develop the Groundbirch Rail Terminal in NEBC, where Tourmaline will own the facility and AltaGas will operate liquids logistics under a long-term LPG tolling and export agreement. In addition, the announced ACE rail terminal partnership in Fort Saskatchewan with Keyera and CN Rail will enhance transportation operating efficiencies.

Construction of REEF continues to advance, with the project approximately 85 percent complete. While onshore execution has remained strong and ahead of plan, in-water construction has proven to be challenging due to maritime conditions and weather delays. As a result, onshore efficiencies are not expected to fully offset higher maritime construction costs. Accordingly, the partnership is modestly increasing the capital cost estimate for the project by 12 percent to approximately $1.5 billion with commercial operations to commence before the end of the first quarter in 2027.

With 80 percent of the jetty complete, and in-water jetty work expected to be completed in the coming weeks, AltaGas views the revised capital cost and schedule as achievable and supported by a strong execution plan with sufficient capital and schedule contingencies.

AltaGas has reached a positive FID on the $125 million NEBC Liquids Expansion project, which includes a depropanizer, natural gas liquids ("NGL") treater expansion, and debottlenecking work at Townsend that will add 6,000 Bbls/d of fractionation capacity in NEBC. The project is expected to be completed by mid-2028.

CEO Message

"AltaGas delivered record results in the first half of 2026, reflecting strong execution across our business and supportive market fundamentals," said Vern Yu, President and Chief Executive Officer of AltaGas. "Our increased guidance reflects strong operational performance in the first half of 2026 and confidence in our outlook for the balance of 2026.

"The long-term outlook for our Utilities business is strong. Demand for natural gas across the U.S. continues to increase, driven by expanding commercial and industrial activity, data center and large-load development, and ongoing population growth. The Mid-Atlantic region is at the center of this expansion and requires safe, reliable, and affordable energy to support continued economic growth.

"We remain on-track to deliver approximately 10 percent Utilities rate base growth in 2026 through a combination of infrastructure modernization, system expansions, and new customer connections. These investments enhance system safety and reliability, support customer growth, and position our Utilities to continue delivering stable earnings growth.

"The outlook for our Midstream business is also very robust. Asian LPG demand has increased by more than two million barrels per day over the past decade and is expected to grow by another one million barrels per day by 2040. At the same time, energy security and supply diversification have become increasingly important in Asia as recent geopolitical events have reinforced the value of reliable energy supply. Canada has a unique opportunity to help meet global energy demand needs and AltaGas' West Coast export platform is the most efficient and cost effective global LPG supply source into East Asia.

"We are excited to bring the first phase of REEF into service in early 2027 and further strengthen Canada's position as a leading LPG exporter to Asia. Beyond REEF Phase I and Optimization I, we continue to advance a visible portfolio of growth opportunities, including additional LPG export capacity, potential ethane exports, and broader Midstream expansion projects. We are pleased to demonstrate additional Midstream growth with positive FID's of the NEBC Liquids Expansion project and the Groundbirch Rail partnership.

"The future is bright for AltaGas. We have a clear path to grow our Utilities and Midstream businesses, supported by strong fundamentals, disciplined capital allocation, and a deep inventory of high-quality growth opportunities. We remain focused on executing safely and efficiently while continuing to deliver dependable earnings growth and long-term shareholder value."

Forward Focus, Guidance and Funding

Following a strong second quarter of 2026 and record first half results, AltaGas has increased its 2026 financial guidance. The guidance revision has been driven primarily by stronger performance from the global export business:

2026 Normalized EBITDA guidance of $2.0 billion–$2.1 billion represents a four percent increase from original guidance; and

2026 Normalized EPS guidance of $2.35–$2.60, represents a six percent increase from original guidance.

AltaGas is focused on delivering resilient and growing normalized EPS and normalized FFO per share while operating with strong financial flexibility. This strategy is designed to support steady dividend growth and provide the opportunity for continued capital appreciation for long-term shareholders.

Reflecting the increased capital costs related to jetty construction of REEF, and additional midstream capital associated with the NEBC Liquids Expansion and Groundbirch Rail Terminal, AltaGas has increased its 2026 capital program guidance from approximately $1.7 billion to approximately $1.8 billion, excluding ARO. The Company is allocating approximately 61 percent of its consolidated 2026 capital to its Utilities business, approximately 36 percent to the Midstream business, and the balance to the Corporate/Other segment.

Results by Segment

| Normalized EBITDA (1) | Three Months Ended

June 30 | | | ($ millions) | 2026 | 2025 | | Utilities | $ 142 | $ 134 | | Midstream | 285 | 215 | | Corporate/Other | (36) | (7) | | Normalized EBITDA (1) | $ 391 | $ 342 |

| (1) Non‑GAAP financial measure; see discussion in Non‑GAAP Financial Measures section of this news release. |

| Income (Loss) Before Income Taxes | Three Months Ended

June 30 | | | ($ millions) | 2026 | 2025 | | Utilities | $ 33 | $ 95 | | Midstream | 509 | 263 | | Corporate/Other | (159) | (132) | | Income Before Income Taxes | $ 383 | $ 226 |

Business Performance

Midstream

The Midstream segment reported normalized EBITDA of $285 million in the second quarter of 2026 compared to $215 million in the second quarter of 2025, while income before income taxes was $509 million in the second quarter of 2026 compared to $263 million in the second quarter of 2025. The 33 percent year-over-year increase in normalized Midstream EBITDA was driven by strong global export volumes and margins, and contributions from Pipestone II. Financial performance was partially offset by lower extraction contribution and higher segment general and administrative expenses ("G&A"), principally related to incentive compensation expenses due to AltaGas' rising share price.

AltaGas exported a record 144,420 Bbl/d of LPGs to Asia in the second quarter of 2026, across 23 VLGCs, reflecting strong demand for North American LPG exports throughout the region. Consolidated export volumes included approximately 84,800 Bbl/d from 13 cargoes at RIPET and approximately 59,600 Bbl/d from 10 cargoes at Ferndale. During the quarter, AltaGas delivered volumes to a diverse customer base across Asia, including China, South Korea, and Japan. Demand was robust as customers sought both near-term supply solutions amid Middle East supply disruptions and discussions on long-term contracting opportunities to diversify supply sources and enhance energy security.

Performance across the broader Midstream platform remained strong. AltaGas' Montney infrastructure continued to deliver resilient growth despite weaker regional gas prices, with second quarter gathering and processing ("G&P") volumes increasing eight percent year-over-year, led by the Pipestone Complex. Fractionation and Liquids Handling volumes increased 20 percent year-over-year, supported by strong utilization at North Pine, which continued to operate near its 25,000 Bbl/d capacity.

Growth Projects

REEF Phase I

Construction of Phase I of REEF continues to advance and is expected to achieve commercial operations before the end of the first quarter in 2027. The revised schedule reflects delays to in-water jetty construction resulting from adverse weather conditions and marine-related operating constraints. Onshore execution has progressed well, with major equipment installation more than 90 percent complete and the rail utility corridor 80 percent complete.

As a result of additional resources deployed to support jetty construction activities, gross project costs are now expected to total approximately $1.5 billion, representing a 12 percent increase from the original estimate. The revised budget primarily reflects weather-related delays and marine mammal protection measures that affected construction of the 1.2-kilometer jetty and resulted in materially higher downtime than originally anticipated.

Export Optimization Projects

The Company's REEF Optimization I project remains on budget and on schedule for an expected in-service date in the second half of 2027 and will add approximately 30,000 Bbl/d of incremental propane export capacity for a gross capital cost of $110 million. AltaGas continues to advance the 60,000 Bbl/d REEF Optimization II project, with key regulatory permits secured and engineering work progressing toward final cost estimates. Together, these capital-efficient expansions are expected to further strengthen AltaGas' ability to meet growing Asian demand for North American LPGs.

RIPET

RIPET's methanol removal project remains on budget and on track for completion by 2026 year-end. Civil work began in June and continues, while mechanical mobilization is expected in early August.

Dimsdale Storage Expansion

Construction of the Dimsdale Phase I and II storage expansion remain on budget and schedule and are now more than 50 percent complete. Pipeline tie-ins have been completed and facility construction continues to advance. Drilling activities for the injection wells remain on track to begin in the third quarter.

Phase I is expected to add six Bcf of storage capacity by 2026 year-end, while Phase II is expected to provide an additional 30 Bcf by mid-2027.

Groundbirch Rail Terminal and NEBC Liquids Expansion Projects

AltaGas and Tourmaline have reached an agreement to develop the Groundbirch Rail Terminal in NEBC. Tourmaline will own the facility, while AltaGas will operate and manage liquids logistics. The project is initially expected to move up to 10,000 Bbl/d of LPG on rail, with the potential to grow substantially over time, and is underpinned by a long-term LPG tolling agreement, to support Tourmaline's Groundbirch operations. The NEBC Liquids Expansion is expected to provide an additional 6,000 Bbl/d of fractionation capacity in NEBC and improved liquids handling to serve production growth in the region and has a planned in-service-date of mid-2028.

Mountain Valley Pipeline Growth Projects

Construction of MVP Southgate is underway, with pipeline welding commencing in early July and an accelerated construction completion timeline of year-end 2026. AltaGas expects to incur the majority of its US$19 million capital commitment for MVP Southgate in 2026. MVP Boost also continues to advance, with efforts focused on resolving the remaining regulatory approvals, and remains on track for completion by mid-2028. AltaGas believes the long-term outlook for the MVP Mainline, Boost and Southgate remain compelling as the assets will compound long-term value for the Company's shareholders.

AltaGas continues to advance a substantial portfolio of high-return growth opportunities across its Midstream platform, including REEF Optimization II, Pipestone III, additional LPG export capacity, potential ethane exports, and related liquids infrastructure investments. The Company remains focused on advancing regulatory, engineering, commercial, and contracting activities to support future capital allocation decisions and long-term growth.

Risk Management

AltaGas' Midstream operations are well-hedged for the remainder of 2026 with approximately 91 percent of the remaining 2026 expected global export volumes tolled or financially hedged. Merchant volumes are hedged at an average Far East Index ("FEI") to North American financial hedge price of US$21.81/Bbl while tolling volumes remain in-line with previously disclosed levels.

Approximately 84 percent of the Company's remaining 2026 expected frac exposed volumes are hedged at US$22.34/Bbl, prior to transportation costs. AltaGas continues to actively manage risk across the Midstream platform through commercial contracting and a systematic hedging program to manage its commodity price exposure.

For the remainder of 2026, AltaGas has hedged all of its expected Baltic freight exposure through time charters, financial hedges, and tolled volumes.

| Midstream Hedge Program | Q3 2026 | Q4 2026 | Remainder of 2026 | | Global Exports volumes hedged (%) (1) | 96 | 85 | 91 | | Average propane/butane FEI to North America hedge (US$/Bbl) (2) (3) | 21.23 | 22.57 | 21.81 | | Fractionation volume hedged (%) (3) | 88 | 81 | 84 | | Frac spread hedge rate - (US$/Bbl) (3) | 20.95 | 23.5 | 22.34 |

| (1) | Approximate expected volumes hedged based on AltaGas' internally assumed export volumes. Hedged amounts include contracted tolling volumes and financial hedges. | | (2) | Does not include physical differential to FSK for C3 volumes. Butane is hedged as a percentage of WTI. | | (3) | Approximate average for the period. |

Utilities

Utilities reported normalized EBITDA of $142 million in the second quarter of 2026 compared to $134 million in the second quarter of 2025, while income before income taxes was $33 million in the second quarter of 2026 compared to $95 million in the second quarter of 2025. The six percent year-over-year increase in normalized EBITDA was primarily driven by continued system modernization investments, new rates in D.C. and Virginia, and favourable Retail performance.

Regulatory Updates

AltaGas continues to advance its regulatory agenda, supported by a constructive outcome in Maryland and anticipated decisions in both Virginia and Michigan during the second half of 2026.

In Maryland, AltaGas recently received an order related to the Company's December 2025 filing. The PSC of MD approved US$38.1 million of new annual revenue, inclusive of certain costs currently recovered through the STRIDE Plan surcharge, based on an allowed return on equity ("ROE") of 9.4 percent. The Company continues to review the impact of the order, with requests for reconsideration due by August 26, 2026.

In Virginia, interim rates remain in effect while AltaGas seeks approximately US$104 million of rate relief, consisting of US$65 million of incremental annual revenue and a US$39 million SAVE surcharge.

In Michigan, SEMCO's February 2026 filing requests approximately US$61 million of incremental annual revenue and includes a proposal to extend its modernization programs through 2031, representing approximately US$284 million of additional investment.

On June 30, 2026, the PSC of D.C. approved the extension of PROJECTpipes 2 through December 31, 2026 due to the extension of the District SAFE procedural schedule, with an incremental spending limit of US$18 million for previously approved projects. The company recently completed the regulatory hearings related to District SAFE and expects resolution before year end 2026.

Growth Projects

The Keweenaw Connector Pipeline in Michigan advanced into active construction during the second quarter and remains on track for its planned 2026 year-end in-service date. Grading, pipe stringing, bending and welding activities are underway, with all line pipe and the majority of major materials delivered during the quarter. Safety performance remains strong and, once in service, the pipeline is expected to enhance system reliability and support the long-term energy needs of customers across Michigan's Upper Peninsula.

AltaGas' Utilities business continues to advance its data center growth opportunities, with two agreements executed, multiple FEED studies completed and a growing backlog of projects at various stages of development. The two contracted projects continue to progress as planned and remain on track for completion by 2026 year-end. AltaGas remains focused on pursuing these opportunities through a disciplined and de-risked approach, primarily by investing in pipeline interconnections and related regulated infrastructure that connect onsite power generation to Utility systems.

AltaGas invested $239 million in Utilities capital during the quarter, including investing approximately $130 million towards the Company's various asset modernization programs and $21 million towards new customer growth. These investments improve the safety and reliability of the network while helping maintain affordability through lowering long-term operating costs.

Corporate/Other

The Corporate/Other segment reported a normalized EBITDA loss of $36 million for the second quarter of 2026, compared to a $7 million loss reported in the same quarter of 2025. Loss before income taxes in the Corporate/Other segment was $159 million in the second quarter of 2026, compared to a loss before income taxes of $132 million in the same quarter of 2025. Higher G&A expenses related to employee incentive costs were the main driver of the increased loss.

Consolidated Financial Results

| | Three Months Ended

June 30 | | | ($ millions) | 2026 | 2025 | | Normalized EBITDA (1) | $ 391 | $ 342 | | Add (deduct): | | | | Depreciation and amortization | (137) | (126) | | Interest expense | (117) | (114) | | Income tax expense, net of normalizing items | (31) | (15) | | Preferred share dividends | (3) | (5) | | Other (2) | (6) | (1) | | Normalized net income (1) | $ 97 | $ 81 | | | | | | Net income applicable to common shares | $ 288 | $ 175 | | Normalized funds from operations (1) | $ 283 | $ 228 | | Cash from operations | $ 490 | $ 365 | | | | | | ($ per share, except shares outstanding) | | | | Shares outstanding - basic (millions) | | | | During the period (3) | 312 | 299 | | End of period | 312 | 299 | | | | | | Normalized net income - basic (1) | 0.31 | 0.27 | | Normalized net income - diluted (1) | 0.31 | 0.27 | | | | | | Net income per common share - basic | 0.92 | 0.59 | | Net income per common share - diluted | 0.92 | 0.58 |