TD's Take Event
Pembina Pipeline Corp. (PPL) reported Q4/21 AFFO/share of $1.33, above our
estimate of $1.04, recent consensus of $1.12, and Q4/20 AFFO/share of $1.10.
Impact: SLIGHTLY POSITIVE
Strong End to the Year: Fourth quarter results exceeded our expectations
largely due to a strong Marketing contribution with higher NGL and crude oil
prices bolstering margins and a higher contribution from Aux Sable. The Facilities
Division also benefited from new facilities, higher volumes, and a realized gain
on commodity-related derivatives for certain gas processing fees tied to AECO
prices. This was partially offset by lower Pipeline Division contributions from a
combination of factors including declines in Ruby Pipeline, contract expirations at
the Nipisi and Mitsue pipelines, and lower volumes on Cochin. Full year adjusted
EBITDA exceeded the high end of the company's guidance range.
Share Repurchase Underway: During Q4/21, PPL repurchased $17 mln of
common shares which progresses the company's intentions of allocating up to
$200 mln of excess cash flow to buy-backs by mid-2022. PPL expects to make a
FID on Hythe Deep Cut in H1/22 and on the Prince Rupert Terminal Expansion in
Q1/22. With its partner TRP, on February 1, 2022 PPL submitted a proposal for
the Alberta Carbon Grid in response to the Alberta government's request for a full
proposal. We expect the new CEO Scott Burrows to provide more context around
capital allocation decisions prospectively on the Q4 conference call.
Conference Call Today at 10:00 am ET: Dial-in: 647-792-1240 or 800-437-2398.
Replay: 647-436-0148 or 888-203-1112, passcode: 8107708