AltaGas Ltd.

AltaGas reported Q2 2026 normalized EBITDA of $391 million, up 14% year over year, and normalized EPS of $0.31, up 15%. Utilities normalized EBITDA was $142 million, up 6%, while Midstream normalized EBITDA was $285 million, up 33%. The company exported a record 144,000 barrels per day of LPG, up 13% year over year, and closed the quarter with leverage at 4.4x. For 2026, management raised normalized EBITDA guidance to $2.0 billion-$2.1 billion and normalized EPS guidance to $2.35-$2.60 per share; it also increased the 2026 capital budget to $1.8 billion from $1.7 billion. REEF is now expected to come online before the end of Q1 2027, and its capital cost estimate was increased by 12% to approximately $1.5 billion.

The CEO framed the quarter as proof that AltaGas is executing well across both Midstream and Utilities, with record volumes, stronger throughput, and improving visibility into future cash flows. He emphasized that the global LPG market disruption is tightening balances and supporting Canadian export opportunities, while also pointing to future growth optionality through REEF optimization phases and potential ethane exports. His tone was constructive and confident, but he was clear that REEF’s in-water construction had been more difficult than planned.

The CFO highlighted the financial outperformance: Midstream EBITDA of $285 million was up 33% year over year, Utilities EBITDA was $142 million, up 6%, and the company delivered $391 million of normalized EBITDA overall. He said the stronger first half allowed AltaGas to raise 2026 guidance and increase capital spending to $1.8 billion, with 61% of capital going to Utilities and 36% to Midstream. He also noted leverage at 4.4x, below the 4.5x to 5x target range, and said it should move toward the midpoint as the year progresses. On risk management, he cited 91% of remaining 2026 global export volumes as either tolled or financially hedged and said the company is comfortable with shipping exposure into 2027.

Analysts pressed on Northeast B.C. growth, the impact of Tourmaline’s spending pause, and whether AltaGas could continue layering in new export and storage projects. Management said the pause does not change long-term plans, that demand for Opti II tolling is strong, and that the company expects to finalize incremental tolling discussions within a couple of months. Questions also focused on REEF’s expansion runway, ethane exports, Groundbirch economics, and potential third-party volumes; management said ethane is included in the exclusivity, that take-or-pay style contracts are the goal, and that Groundbirch requires less than $20 million of capital with meaningful rail-cost savings. On regulation, management defended its Utilities strategy, said there is no change in approach, and reiterated opposition to gas bans and focus on closing the ROE gap.