Energia
Pembina Pipeline Corporation Reports First Quarter Results
All financial figures are in Canadian dollars unless noted otherwise.
CALGARY, Alberta , May 7, 2020 /CNW/ - Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA) announced today its financial and operating results for the first quarter of 2020.
During this challenging and unprecedented period, everyone at Pembina hopes the Company's stakeholders - its employees, communities, customers and investors - are safe, healthy and finding a way to manage through these uniquely difficult circumstances. Pembina remains focused on the business and meeting the needs of customers while acknowledging the human impact and the immense toll the COVID-19 pandemic is having on everyone.
The current pandemic has far reaching implications for both human health and the health of the global economy. The concurrent decline in global energy prices further magnifies this crisis for energy-related businesses and the people and communities that are dependent upon them.
Today, while Pembina reported strong quarterly financial and operational results, the impact of these crises will begin to materialize more fully in subsequent quarters and this has informed Pembina's outlook for the remainder of the year, including our 2020 guidance, as discussed further below. In response to the health pandemic and the resulting significant decline in global energy prices, Pembina previously announced a decisive action plan to protect all its stakeholders.
$1.3 billion of new projects are expected to come into service throughout 2020 and early 2021. The decision to continue spending on these projects was informed by the fact that they are all well advanced, or nearing completion, and are therefore expected to contribute incremental adjusted EBITDA in the near future. By contrast, the deferred projects were in the early stages of planning or construction.
Planning, engineering and regulatory work done to date on the deferred projects will allow Pembina to quickly resume these projects to meet customers' needs when global energy prices and the broader economic environment support such action.
Pembina recognizes that the prevailing energy prices and temporary demand disruptions have forced the Company's producing customers to take actions to preserve liquidity and strengthen their balance sheets. Capital budgets are being drastically reduced, which will result in moderation of growth or production declines. At the same time, producers continue to require safe and reliable midstream services to ensure their products continue to reach demand markets to maximize cash generation in this environment and ensure North American energy needs continue to be met.
Pembina has evaluated the impact producer spending decisions are expected to have on its business. While some volume declines across our system are anticipated, much of Pembina's business is protected by strong contracts. Pembina expects its marketing business will be more negatively impacted by the rapid and significant decline in energy prices. However, declining volumes and a lower marketing contribution will be somewhat offset by approximately $100 million of operating and administrative cost savings and efficiencies, which have been implemented throughout the business.
Overall, Pembina continues to expect 2020 adjusted EBITDA to remain within the previously disclosed guidance range, albeit the Company expects to be near the lower end of that range based on current estimates. While factoring in reduced volumes and lower commodity prices as noted above, the duration of the current situation and large-scale shut-ins could cause Pembina to fall below the low end of the guidance range.
Pembina's business is resilient in the face of current challenges. An unwavering commitment to the Company's financial guardrails has been a guiding principle for many years and, as a result, Pembina is well positioned.
The current situation is unparalleled and brings with it some unique challenges. However, Pembina has faced adversity before and always emerged strong. The Company weathered the 2008-09 financial crisis and the 2015- 16 energy price collapse. Pembina remained resilient throughout these cycles, growing both organically and through acquisition, which allowed it to deliver annual increases in adjusted EBITDA and dividends per common share. Further, the Company maintained an investment grade credit rating throughout. Today, a long-term commitment to the Company's financial guardrails and decisive action to defer capital spending ensures Pembina has the balance sheet strength and liquidity to weather the current storm and ensure that upon a return to more normal economic conditions and higher energy prices, Pembina will be ready and able to continue its long track record of delivering value to all stakeholders.
Pipelines and Facilities have $1.1 billion of capital projects underway, which in aggregate are trending on budget.
Pipelines:
As previously announced, in response to the COVID-19 pandemic, the resulting virtual shutdown of the global economy and the recent significant decline in global energy prices, Pembina made the decision to defer some projects within Pipelines:
Facilities:
Marketing & New Ventures:
Pembina will host a conference call on Friday, May 8, 2020 at 8:00 a.m. MT ( 10:00 a.m. ET ) for interested investors, analysts, brokers and media representatives to discuss results for the first quarter of 2020. The conference call dial-in numbers for Canada and the U.S. are 647-427-7450 or 888-231-8191. A recording of the conference call will be available for replay until May 15, 2020 at 11:59 p.m. ET . To access the replay, please dial either 416-849-0833 or 855-859-2056 and enter the password 3298148.
A live webcast of the conference call can be accessed on Pembina's website at pembina.com under Investor Centre/ Presentation & Events, or by entering: https://produceredition.webcasts.com/starthere.jsp?ei=1290098&tp_key=0acdce5bbf in your web browser. Shortly after the call, an audio archive will be posted on the website for a minimum of 90 days.
The Company will hold its Annual Meeting of common shareholders ("AGM") on Friday, May 8, 2020 at 2:00 p.m. MT ( 4:00 p.m. ET ). The AGM will be held as a virtual-only meeting, which will be conducted via live audio webcast at https://web.lumiagm.com/m#/119921742. Participants are recommended to register for the virtual webcast at least 10 minutes before the presentation start time. A copy of the AGM presentation will be accessible on Pembina's website at www.pembina.com under Investor Centre, Presentation & Events.
For further information on Pembina's virtual AGM, kindly visit the Shareholder Information page under the Investor Centre tab at www.pembina.com.
Pembina is a leading transportation and midstream service provider that has been serving North America's energy industry for 65 years. Pembina owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada. The Company also owns gas gathering and processing facilities; an oil and natural gas liquids infrastructure and logistics business; is growing an export terminals business; and is currently developing a petrochemical facility to convert propane into polypropylene. Pembina's integrated assets and commercial operations along the majority of the hydrocarbon value chain allow it to offer a full spectrum of midstream and marketing services to the energy sector. Pembina is committed to identifying additional opportunities to connect hydrocarbon production to new demand locations through the development of infrastructure that would extend Pembina's service offering even further along the hydrocarbon value chain. These new developments will contribute to ensuring that hydrocarbons produced in the WCSB and the other basins where Pembina operates can reach the highest value markets throughout the world.
Pembina is structured into three Divisions: Pipelines Division, Facilities Division and Marketing & New Ventures Division.
Pembina's common shares trade on the Toronto and New York stock exchanges under PPL and PBA, respectively. For more information, visit www.pembina.com .
Investor Relations, Scott Arnold , Manager Investor Relations, (403) 231-3156, 1-855-880-7404, E-mail: investor-relations@pembina.com, www.pembina.com