Keyera Corp. gained on a fourth-quarter earnings beat driven by outperformance from its Marketing segment.
Before the bell, the Calgary-based company reported adjusted EBITDA of $339-million, topping the Street’s expectation of $290-million.
While its Alberta EnviroFuels “continues to operate well achieving record production in 2023 and strong year-to-date performance,” Keyera announced it will be taking the facility offline for approximately 6 weeks in the spring to “proactively complete maintenance activities.”
“Another quarter of Marketing outperformance drove record ‘23 Marketing realized margin,” said Citi analyst Spiro Dounis. “Notably, AEF will be offline for maintenance for 6 weeks in Spring ‘24 - driving a $35-45-million realized margin headwind. That said, management still expects ‘24 marketing margin to be within its base marketing guidance ($310-350-million) - though formal guidance will come in May. Marketing margins would still need to fall approximately 20 per cent to reach the high end of long term guidance. No change to EBITDA or ‘24 capex guidance. KAPS continues to unlock more commercial success. Specifically, KAPS and KFS added 30kbpd and 33kbpd of long term commitments with majority backed by take-or-pay contracts while KFS also added storage and ancillary services.”
“We expect the large beat to skew the reaction positive, unchanged guidance likely mutes the reaction overall though. AEF downtime is a headwind; however, the reiteration of EBITDA guidance through ‘25 (high end of 6-7-per-cent CAGR) neutralizes that headwind, in our view.”