Stillwater Critical Minerals Corp. press release
ALTAGAS ANNOUNCES 2025 GUIDANCE, SIX PERCENT DIVIDEND INCREASE, AND CONTINUED PROGRESS ON STRATEGIC PRIORITIES
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CALGARY, AB , Dec. 3, 2024 /CNW/ - AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) announces its 2025 guidance and outlook; a six percent increase to its common share dividend; and continued progress on strategic priorities.
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HIGHLIGHTS
(all financial figures are unaudited and in Canadian dollars unless otherwise noted)
2025 normalized EBITDA 1 guidance of $1,775 million - $1,875 million , which represents approximately six percent year-over-year growth using midpoint-to-midpoint guidance figures. Growth is driven by asset modernization investments in the Utilities and improved utilization in Midstream. This growth is partially offset by commercial de-risking initiatives and large multi-year Midstream capital projects that will come online in 2026 and 2027. 2025 normalized EPS 1 guidance of $2.10 - $2.30 , which represents approximately two percent year-over-year growth using midpoint-to-midpoint guidance figures. The Company's 2025 capital program is forecasted to be $1.4 billion 2 , which reflects strong growth opportunities balanced against AltaGas' leverage targets. The 2025 business plan includes slightly more than half of AltaGas' capital allocated to Utilities, with 45 percent funding long-term Midstream projects, and the balance on digital and systems initiatives focused on improving long-term operating efficiency. AltaGas is increasing its common share dividend by six percent to $1.26 per share per year. This is the fifth consecutive dividend increase as the Company remains committed to delivering regular, sustainable, and annual dividend increases. The Company is extending its five to seven percent compounded annual growth rate ("CAGR") guidance on dividends to 2029. AltaGas remains committed to completing the de-leveraging journey and moving towards its 4.0x Adjusted Net Debt 1 to normalized EBITDA 1 leverage target. This aligns with a BBB-mid investment grade credit rating and will provide AltaGas with strong long-term financial flexibility. Monetization of AltaGas' 10 percent equity interest the Mountain Valley Pipeline ("MVP") is the most immediate path to reducing leverage with the cash flows from the Pipestone II and Ridley Island Energy Export Facility ("REEF") projects set to provide incremental de-leveraging. The Utilities have a robust long-term growth outlook driven by investment opportunities focused on continued customer additions, asset modernization, and system expansion. These investments will continue to improve the long-term safety and reliability of the network, allowing AltaGas to continue to meet long-term customer demand for safe, reliable, and affordable natural gas while providing steady rate base growth. Increased Midstream investment in 2025 will position the Company to benefit from the robust growth outlook for Western Canadian natural gas and natural gas liquids ("NGL") production. AltaGas has a strong growth outlook for its Midstream platform based on industry development plans, the location of its infrastructure assets, continued optimization opportunities, and various brownfield and greenfield growth initiatives.
| Notes: 1) Non-GAAP measure; see discussion in the advisories of this news release and reconciliation to US GAAP financial measures shown in AltaGas' Management's Discussion and Analysis (MD&A) as at and for the period ended September 30, 2024, which is available on www.sedarplus.com ; and 2) excluding Asset Retirement Obligations ("ARO"). |
CEO MESSAGE
"We are looking forward to 2025 and continuing to deliver on our strategic plan, which will bring strong value for AltaGas' shareholders" said Vern Yu , AltaGas' President and Chief Executive Officer. "We are wrapping up 2024 on strong footing after delivering on our strategic priorities and we expect 2025 will be another year of growth.
"The growth opportunities in front of us are tremendous. Our Utilities have low-risk growth opportunities from continued customer additions, asset modernization investments and system expansions. The potential of AI and datacenter demand for natural gas in Northern Virginia adds to this already robust outlook and reiterates the long-term need for safe, reliable, and affordable natural gas to keep society moving forward.
"Our growth outlook in Midstream is equally robust. After a decade of being structurally challenged by a lack of take-away capacity, Canada is positioned to deliver significant natural gas and NGL production growth in the years ahead. As liquified natural gas ("LNG") projects on the Canadian West Coast come online, we will continue to benefit from increased demand for additional gas processing, liquids handling, fractionation, and export capacity which are driving investment opportunities across our value chain.
"Our 2025 capital plan reflects these opportunities and our desire to balance this outlook against other strategic priorities, including de-risking the platform and completing our de-leveraging journey. The past year was another period of delivering industry-leading total shareholder returns, including the fifth year of steady dividend increases. We look forward to continuing to compound shareholder value in 2025 through advancing our strategy and focusing on execution."
2025 GUIDANCE
AltaGas expects to achieve normalized EPS 1 of $2.10 - $2.30 and normalized EBITDA 1 of $1,775 million - $1,875 million in 2025. AltaGas' 2025 outlook anticipates year-over-year growth across the Utilities, Midstream and Corporate segments, and includes the assumption of a divestiture of its 10 percent interest in MVP at the end of the second quarter of 2025.
The Utilities segment is expected to represent 54 to 58 percent of 2025 normalized EBITDA 1 . Growth is expected to be driven by a combination of continued new customer additions, rate base growth from our asset modernization programs, normal weather conditions, stronger performance from the Retail business, asset optimization activities, and ongoing cost management.
Washington Gas currently has an active rate case application in the District of Columbia ("D.C.") with requested rates designed to collect an incremental US$34 million in annual revenue, net of US$12 million in Accelerated Replacement Program ("ARP") surcharge. New rates are expected to benefit 2026 financial performance and not have a large impact in 2025. Washington Gas also has a US$215 million asset modernization extension application under review in D.C. and anticipates a decision by May 2025 .
Through ongoing customer additions, asset modernization investments, and continued system expansion, AltaGas estimates having the ability to grow rate base by up to eight percent annually over the next five years. The ultimate amount of realized rate base growth will be a function of the Company's capital allocation priorities. Based on the current Midstream capital investments in 2025, the Company expects to deliver rate base growth below this level in 2025 with an increase in growth rates in 2026 and beyond.
The Midstream segment is expected to represent 42 to 46 percent of 2025 normalized EBITDA 1 . Growth is expected to be driven by strong global export volumes and higher utilization at the Company's existing Montney facilities, including the Townsend complex, North Pine , and Pipestone I. These positive factors are expected to be partially offset by a lower contribution from MVP as AltaGas is actively evaluating divestiture opportunities and has only included a partial year of contribution from the pipeline in the first half of 2025, and lower co-generation revenue at the Harmattan complex.
AltaGas continues to focus on de-risking its business through long-term commercial contracting while actively managing residual commodity price exposure through financial hedging. In 2024, AltaGas made strong progress on this initiative with global exports tolling estimated to be roughly 56 percent of export volumes for the 2024-2025 NGL year.
As disclosed in the third quarter of 2024, AltaGas continued to advance key Midstream commercial priorities in recent months, including:
Entering two agreements that have a high-single digit average contract length with a large investment grade international energy company in Northeastern B.C. ("NEBC") for a total of 100 Mmcf/d of gas processing capacity at the Townsend facility, along with associated liquids handling and fractionation services.
Extending the contract term with a large Canadian investment grade producer at the Pipestone I gas processing facility in the Alberta Montney for an additional five years, including gas processing, liquids handling and marketing services.
Advancing long-term tolling arrangements across the global exports platform with a number of agreements now in definitive documentation stages. This includes AltaGas having contracts in hand or being in active negotiations for more than 100 percent of first phase capacity for REEF. AltaGas continues to target having 60 percent of its export volumes under long-term tolling agreements by the start of the 2027 NGL year.
The Corporate segment is also expected to show stronger year-over-year financial performance in 2025 due to Blythe operating at more stable levels following the extended downtime that was experienced in the first quarter of 2024.
2025 STRATEGIC PRIORITIES
AltaGas has shown strong progress across its strategic priorities in 2024 and remains focused on advancing these priorities in 2025. Specifically, AltaGas' 2025 strategic priorities are:
1. Optimizing assets for maximum returns through increasing utilization rates, extending asset lives, and controlling operating costs to drive the highest returns on capital. 2. Active de-risking through long-term commercial contracting in Midstream, systematic hedging of residual risks, and active regulatory initiatives focused on AltaGas and our customers' long-term interest in the Utilities. 3. Continued balance sheet deleveraging and moving towards the Company's 4.0x Adjusted Net Debt to normalized EBITDA leverage target. 4. Advancing key growth projects , including our asset modernization programs at the Utilities, the completion and commissioning of Pipestone II, and material construction progress at REEF. 5. Continuing to take actions to drive long-term per share value creation across the enterprise.
AltaGas will continue to be very active in advocacy in 2025 and champion the critical work that our company and industry does in delivering safe, reliable, and affordable energy to our global customer base every day. This includes Washington Gas advancing two statements of claims to challenge proposed local gas bans in Maryland and the District of Columbia and ensure our customers have the right to choose their energy source. Natural gas and NGLs are essential to modern day life, and we will continue to advocate for their unfettered use to keep society moving forward.
2025 DIVIDEND INCREASE
AltaGas' Board of Directors approved a six percent increase to the annual common share dividend to $1.26 per share for the 2025 calendar year, which equates to a rate of $0.315 per common share on a quarterly basis. Subject to approval of the Board of Directors, the first quarterly dividend of $0.315 per common share is expected to be effective for the March 2025 dividend and will be paid on March 31, 2025 , to common shareholders of record on March 17, 2025 . These dividends are eligible dividends for Canadian income tax purposes.
2025 CAPITAL
AltaGas' 2025 capital expenditure plan of approximately $1.4 billion , excluding ARO, is modestly weighted towards the Utilities business, which is anticipated to deliver stable rate base growth and drive strong risk-adjusted returns. The Company is allocating approximately 51 percent of consolidated 2025 capital to the Utilities business and approximately 45 percent to the Midstream business. This represents a higher allocation to the Midstream segment compared to prior years due to continued investment in AltaGas' key growth projects, REEF and Pipestone II, as well as various other business development and optimization projects.
The Company will fund 2025 capital requirements through a combination of internally generated cash flows, the investment capacity associated with stronger normalized EBITDA across the enterprise, and ongoing capital recycling with the divestiture of the Company's interest in MVP planned for 2025. Additional asset sales will be considered on an opportunistic basis, with any potential proceeds to be used to strengthen the balance sheet and increase financial flexibility.
| Segment | Total Capital | Major Capital Project and Focus Areas | | Utilities | ~51% | - Maintenance, safety and reliability investments, including system betterment Asset modernization programs across all jurisdictions New customer connects and system expansion | | Midstream | ~45% | - Maintenance, safety and reliability investments REEF and Pipestone II Facility optimization and higher throughput volumes Smaller scale business development and growth projects | | Corporate | ~4% | - Maintenance, digital and system investments |
ABOUT ALTAGAS
AltaGas is a leading North American infrastructure company that connects customers and markets to affordable and reliable sources of energy. The Company operates a diversified, lower-risk, high-growth energy infrastructure business that is focused on delivering stable and growing value for its stakeholders.
For more information visit www.altagas.ca or reach out to one of the following:
Jon Morrison Senior Vice President, Corporate Development and Investor Relations Jon.Morrison@altagas.ca
Aaron Swanson Vice President, Investor Relations Aaron.Swanson@altagas.ca
Investor Inquiries 1-877-691-7199
Media Inquiries 1-403-206-2841 media.relations@altagas.ca
FORWARD-LOOKING INFORMATION
This news release contains forward-looking information (forward-looking statements). Words such as "guidance", "may", "can", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "aim", "seek", "propose", "contemplate", "estimate", "focus", "strive", "forecast", "expect", "project", "target", "potential", "objective", "continue", "outlook", "vision", "opportunity" and similar expressions suggesting future events or future performance, as they relate to the Company or any affiliate of the Company, are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. Specifically, such forward-looking statements included in this document include, but are not limited to, statements with respect to the following: 2025 guidance including normalized EBITDA guidance of $1,775 million to $1,875 million and normalized EPS guidance of $2.10 to $2.30 ; the Company's capital program of $1.4 billion , excluding ARO; allocation of capital among Utilities, Midstream and digital and systems initiatives; the future dividend strategy including a six percent increase to AltaGas' anticipated common share dividend; the Company's commitment to delivering regular, sustainable and annual dividend increases; the Company's CAGR guidance on dividends to 2029; AltaGas' de-leveraging journey and its 4.0x Adjusted Net Debt to Normalized EBITDA leverage target; the belief that de-leveraging will provide AltaGas with strong long-term financial flexibility and that monetization of MVP is the most immediate path to reducing leverage along with cash flows from the Pipestone II and REEF projects providing incremental de-leveraging; driving factors behind the Utilities' long-term growth outlook; the expectation that investment opportunities in the Utilities will improve the long-term safety and reliability of the network and the anticipated benefits therefrom; increased investment in the Midstream business and the anticipated benefits therefrom including the growth outlook for the Midstream platform; AltaGas' strategic plan, its ability to deliver on the strategic plan and the anticipated value for shareholders therefrom; AltaGas' growth opportunities including the potential of AI and datacenter demand for natural gas; the expectation that AltaGas will continue to benefit from increased demand for additional gas processing, liquids handing, fractionation and export capacity; AltaGas commitment to its 2025 capital plan and compounding shareholder value in 2025; anticipated year-over-year growth across the Utilities, Midstream and Corporate segments; the assumption that AltaGas will divest its 10 percent interest in MVP at the end of the second quarter of 2025; the expectation that the Utilities segment will generate approximately 54 to 58 percent of 2025 normalized EBITDA driven by continued new customer additions, rate base growth from asset modernization programs, normal weather conditions, stronger performance from the Retail business, asset optimization activities and ongoing cost management; anticipated annual revenue from Washington Gas' active rate case application in DC and the anticipated benefits therefrom in 2026; timing for receiving a decision on Washington Gas' asset modernization extension application in DC; anticipated rate base growth of up to eight percent annually over the next five years with the expectation that AltaGas will deliver rate base growth below that level in 2025 with an increase in growth rates in 2026 and beyond; the expectation that the Midstream segment will generate approximately 42 to 46 percent of 2025 normalized EBITDA driven by strong global export volumes and higher utilization at the Company's existing Montney facilities; AltaGas' focus on de-risking its business through long-term commercial contracting and actively managing residual commodity price exposure through financial hedging; AltaGas' target of having 60 percent of its export volumes under long-term tolling agreements by the start of the 2027 NGL year; anticipated financial performance of the Corporate segment in 2025 due to Blythe operating at more stable levels; AltaGas' strategic priorities and its commitment to advancing these priorities in 2025; AltaGas' commitment to being active in advocacy in 2025 including challenging proposed gas bans in Maryland and DC; anticipated approval of the quarterly dividend on common shares and the effective date and timing for payment to shareholders of such dividend; the expectation that the Utilities business will deliver stable rate base growth and drive strong risk-adjusted returns; the allocation of consolidated 2025 capital to the Utilities and Midstream businesses; the expectation that the Company will fund 2025 capital requirements through a combination of internally generated cash flows, the investment capacity associated with stronger normalized EBITDA across the enterprise, and ongoing capital recycling with the divestiture of the Company's interest in MVP planned for 2025; consideration of asset sales and the use of potential proceeds therefrom; and anticipated capital expenditure by segment and expected projects for each segment.
Such statements reflect AltaGas' current expectations, estimates, and projections based on certain material factors and assumptions at the time the statement was made. Material assumptions include: effective tax rate; anticipated timing of asset sale and acquisition closings; the U.S/Canadian dollar exchange rate; inflation; interest rates; credit ratings; regulatory approvals and policies; expected commodity supply, demand and pricing; volumes and rates; propane price differentials; degree day variance from normal; pension discount rate; financing initiatives, the performance of the businesses underlying each sector; impacts of the hedging program; weather; frac spread; access to capital; future operating and capital costs; timing and receipt of regulatory approvals; seasonality; planned and unplanned plant outages; timing of in-service dates of new projects and acquisition and divestiture activities; taxes; operational expenses; returns on investments; dividend levels; and transaction costs.