Where ALA is heading in 2021.Guide line for 2021
- On Dec. 10, 2020, AltaGas announced 2021 guidance and a 4-per-cent increase to the common share dividend. The 2021 outlook remains unchanged with expected normalized EBITDA in the range of $1.4-billion to $1.5-billion and normalized EPS of $1.45 to $1.55. This guidance is underpinned by expectations for steady growth in utilities and mid-stream, which is anticipated to drive declining leverage ratios and reduced payout ratios.
Just to remember the 2020 results:
- Normalized earnings before interest, taxes, depreciation and amortization (EBITDA was $1.31-billion for the full year in 2020 and was in the higher end of the guidance range of $1,275-million to $1,325-million, despite the challenges associated with the COVID-19 pandemic. Results reiterate the resiliency of the platform and relentless focus on execution.
So what ALA need for 2021 is an Ebitda increase of $ 90 M to $ 140 M
to deliver according to guidance.
Some positive points to take note is the acquisition of the extra 34% of Petrogas Energy to bring the total ownership to 74 %.The expected EBITDA from this transaction is expected to be :
«Assuming reasonable LPG exports from Ferndale in 2021, the current forward curves and other logical assumptions, coupled with Petrogas's fixed fee-based contracts, Petrogas is expected to earn an estimated $185-million of normalized EBITDA in 2021, prior to operational synergies. In addition, by optimizing the marketing contract portfolios and logistics, together with supply chain efficiencies and potential cost savings, AltaGas also estimates there to be an opportunity for approximately $30-million of annual synergies, which the company will plan to take steps to substantially achieve in the first year and be fully realizing these on a run-rate basis at the end of 2021.
So a potential of $ 215 M.
With the number we have on the Ferndale exportation we may say that the term ''resonable LPG export''is rather weak. .
As per what I have been informed the seasonality is 39 % for the Q1 and give $ 84 M for the Q1
Main business for ALA is the Utilities where they expect a 8 to 10 % increase. In 2020 the Ebitda was $ 788 M and considering seasonality or 40 % give an Ebitda of $ 315 M and a 8 % increase is an extra $ 31 M
The demontration has been made that RIPET has had a 43 %
increase in the Q1 2021 and may represent an extra $ 10 M
Ebitda
Financial cost has been reduced again in March
However cannot ''guestimate''on extra revenue with
fractionation/storing/transportation etc etc
The total so far is $ 125 M on a total projected for the year of
$ 90 to $ 140 M to deliver according to ''guidance''
The only ''headwind'' ALA is facing is the foreign
exchange cost on 40 % of utilities revenue in the Q1 .
Overall ,ALA is heading in the good direction and Q1 financial
report should bring the share price to higher level and why
not to $ 23,50