cibc : Q2 First Look: In-line Quarter, Guidance ReiteratedPrice Target (12-18 mos.): C$20.00
Q2 2020 First Look: In-line Quarter, Guidance Reiterated Q2 results were largely in line with our estimates, and the company is weathering the impacts of COVID-19 well. The company reported adjusted EBITDA of $206MM compared to our estimate of $204MM and consensus of $208MM. Adjusted EPS of $0.06 compared to our estimate of ($0.03) and consensus of $0.00. 2020 guidance was reiterated, including adjusted EBITDA of $1.275B to $1.325B, and adjusted EPS of $1.20 - $1.30. The $900MM capex plan for 2020 remains unchanged. The Utilities segment reported adjusted EBITDA of $80MM, below our estimate of $92MM due to lower realized margins in the retail business and COVID-19 related impacts, but partially offset by 2019 rate cases and an accelerated pipe replacement program. The Midstream segment reported adjusted EBITDA of $111MM, in line with our estimate and driven by strong volumes at Ridley Island Propane Export Terminal (RIPET), which reported record volumes of 41,460 Bbl/d, and seven ships making deliveries of Canadian propane to the Asia market. RIPET contributed $30MM of EBITDA during the quarter, and is 87% hedged for the balance of the year. The company was active during the quarter in the debt markets and refinanced all its remaining 2020 debt maturities through two debt financings. These debt financings include a private placement of US$450MM first mortgage bonds and $500MM issuance of senior unsecured medium-term notes. During the quarter, the company entered into an agreement to sell a 49.5 MW gas fired facility in Ripon, California to Clarion Energy. The deal is expected to close in Q3. The company also announced that it had closed the disposition of AltaGas Pomona Energy Storage and the land related to a gasfired power generation facility in the U.S. Gross proceeds before adjustments to AltaGas were $63 million. The company will be holding a conference call today at 12:00PM ET. Dial-in: 647-427-7450 or 1-888-231-8191, no passcode required.