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Pembina Pipeline Corporation Reports Third Quarter 2016 Results

Press Release

Delivering growth and strong financial performance with continued success in capital program execution

All financial figures are in Canadian dollars unless noted otherwise.

CALGARYNov. 3, 2016 – Pembina Pipeline Corporation (“Pembina” or the “Company”) (TSX: PPL; NYSE: PBA) announced today its financial and operating results for the third quarter of 2016.

Financial Overview

($ millions, except where noted)

3 Months Ended
September 30
(unaudited)

9 Months Ended
September 30
(unaudited)

2016

2015

2016

2015

Conventional Pipelines revenue volumes (mbpd)(1)(2)

643

600

654

612

Oil Sands & Heavy Oil contracted capacity (mbpd)(1)

975

880

975

880

Gas Services revenue volumes (mboe/d) net to Pembina(2)(3)

149

115

131

112

Midstream Natural Gas Liquids (“NGL”) sales volumes (mbpd)(1)

136

109

136

114

Total volume (mboe/d)(3)

1,903

1,704

1,896

1,718

Revenue

970

1,026

3,014

3,393

Net revenue(4)

427

374

1,250

1,100

Operating margin(4)

317

271

959

814

Gross profit

246

201

731

629

Earnings

120

113

335

276

Earnings per common share – basic and diluted (dollars)

0.25

0.29

0.73

0.70

Adjusted EBITDA(4)

287

245

847

714

Cash flow from operating activities

247

187

791

516

Cash flow from operating activities per common share – basic (dollars)(4)

0.63

0.54

2.05

1.51

Adjusted cash flow from operating activities(4)

250

209

694

598

Adjusted cash flow from operating activities per common share – basic (dollars)(4)

0.64

0.60

1.80

1.75

Common share dividends declared

188

158

547

460

Preferred share dividends declared

20

14

50

35

Dividends per common share (dollars)

0.48

0.46

1.42

1.34

Capital expenditures

537

478

1,292

1,363

Acquisition

566

 

3 Months Ended
September 30
(unaudited)

9 Months Ended
September 30
(unaudited)

2016

2015

2016

2015

($ millions)

Revenue(5)

Operating
Margin(4)

Revenue(5)

Operating
Margin(4)

Revenue(5)

Operating
Margin(4)

Revenue(5)

Operating
Margin(4)

Conventional Pipelines

183

121

159

92

535

376

465

292

Oil Sands & Heavy Oil

49

36

52

33

148

103

157

103

Gas Services

72

52

54

39

189

135

157

111

Midstream(5)

122

106

109

105

378

338

321

304

Corporate

1

2

2

7

4

Total

427

317

374

271

1,250

959

1,100

814

 

(1)

mbpd is thousands of barrels per day.

(2)

Revenue volumes are equal to contracted plus interruptible volumes.

(3)

Revenue volumes converted to mboe/d (thousands of barrels of oil equivalent per day) from million cubic feet per day (“MMcf/d”) at 6:1 ratio.

(4)

Refer to “Non-GAAP Measures.”

(5)

The amounts presented for Midstream consist of net revenue (revenue less cost of goods sold including product purchases). Refer to “Non-GAAP Measures.”

Highlights

  • Generated third quarter and year-to-date earnings of $120 million and $335 million, a six and 21 percent increase, respectively, over the same periods of the prior year;
  • Adjusted EBITDA was $287 million in the third quarter and $847 million year-to-date, 17 percent and 19 percent higher than the third quarter and first nine months of 2015;
  • Cash flow from operating activities increased by 32 percent and 53 percent to $247 million and $791 million while adjusted cash flow from operating activities increased by 20 percent and 16 percent to $250 million and $694 million compared to the third quarter and first nine months of 2015;
  • On a per share (basic) basis during the three and nine months ended September 30, 2016, cash flow from operating activities increased 17 percent and 36 percent, respectively, and adjusted cash flow from operating activities increased seven percent and three percent, respectively, compared to the same periods of the prior year;
  • Completed previously announced expansions of both the Vantage and Horizon pipeline systems under-budget; and
  • Raised $500 million of gross proceeds through the issuance of senior unsecured Series 7 medium-term notes.

“I’m pleased with our quarterly results during a time in which we are undertaking an unprecedented volume of construction activities at Pembina,” said Mick Dilger, Pembina’s President and Chief Executive Officer. “We continue to experience success in executing our large capital program while maintaining our focus on safe and reliable operations. With a strong balance sheet in hand, we are well-positioned to complete the remainder of our secured growth portfolio and enhance long-term shareholder value.”

New Developments in 2016 and Growth Projects Update

  • Pembina’s $2.4 billion Phase III Expansion is now approximately 50 percent complete and construction is underway on the largest section of the project between Fox Creek, Alberta and Namao, Alberta;
  • Secured regulatory approval for Pembina’s 100 MMcf/d Duvernay I facility and progressed development of the supporting infrastructure;
  • Construction activity at the Company’s third fractionator (“RFS III”) is ongoing, with mechanical construction 75 percent complete;
  • Progressed development of terminalling infrastructure at Pembina’s Redwater site in support of North West Redwater Partnership’s planned refinery;
  • Completed 70 percent of civil work associated with Pembina’s Canadian Diluent Hub and advanced development of further interconnectivity between Pembina’s existing Conventional and Midstream infrastructure; and
  • Pembina and Petrochemical Industries Company K.S.C. (“PIC”), a subsidiary of the Kuwait Petroleum Corporation, have completed their detailed technical, financial and commercial study regarding the development of a combined propane dehydrogenation (“PDH”) and polypropylene (“PP”) upgrading facility in Alberta (the “PDH and PP Facility”). Pembina and PIC are jointly evaluating the study findings and expect to make a decision on proceeding to Front End Engineering Design by the end of 2016.

Dividends

  • Declared and paid dividends of $0.16 per qualifying common share in July, August and September 2016 for the applicable record dates; and
  • Declared and paid quarterly dividends per qualifying preferred shares of: Series 1: $0.265625; Series 3: $0.29375; Series 5: $0.3125; Series 7: $0.28125; Series 9: $0.296875; Series 11: $0.359375; and Series 13: $0.5002 to shareholders on record as of August 1, 2016.

Third Quarter 2016 Conference Call & Webcast

Pembina will host a conference call on Friday, November 4, 2016 at 8:00 a.m. MT (10:00 a.m. ET) for interested investors, analysts, brokers and media representatives to discuss details related to the third quarter of 2016. 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 November 11, 2016 at 11:59 p.m. ET. To access the replay, please dial either 416-849-0833 or 855-859-2056 and enter the password 92805628.

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: http://event.on24.com/r.htm?e=1102324&s=1&k=B668FDE0C802236008BA502A98896DE9 in your web browser. Shortly after the call, an audio archive will be posted on the website for a minimum of 90 days.

About Pembina

Calgary-based Pembina Pipeline Corporation is a leading transportation and midstream service provider that has been serving North America’s energy industry for over 60 years. Pembina owns and operates an integrated system of pipelines that transport various products derived from natural gas and hydrocarbon liquids produced primarily in western Canada. The Company also owns and operates gas gathering and processing facilities and an oil and natural gas liquids infrastructure and logistics business. 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 working with its community and aboriginal neighbours, while providing value for investors in a safe, environmentally responsible manner. This balanced approach to operating ensures the trust Pembina builds among all of its stakeholders is sustainable over the long term. Pembina’s common shares trade on the Toronto and New York stock exchanges under PPL and PBA, respectively. Pembina’s preferred shares also trade on the Toronto stock exchange. For more information, visit www.pembina.com.

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