Keyera Corp.

Keyera reported second-quarter adjusted EBITDA of $309 million excluding transaction costs related to the Plains acquisition, distributable cash flow of $101 million or $0.39 per share, and net earnings of $308 million. Gathering and Processing realized margin reached a quarterly record of $128 million, Liquids Infrastructure realized margin hit a record $222 million, and Marketing realized margin was $36 million. Management said the marketing segment’s year-over-year decline was mainly due to the AEF outage and timing impacts from risk management activities, with some offset expected in the second half as physical volumes are sold. Net debt to adjusted EBITDA was 3.3x, above the long-term target range. Looking ahead, Keyera reaffirmed 2026 realized margin guidance for Marketing of $360 million to $390 million and said 2026 guidance for growth capital, maintenance capital and cash taxes was unchanged. Management also reiterated its targets for 16% to 18% fee-based adjusted EBITDA per share CAGR from 2025 to 2027 and 7% to 8% from 2027 to 2029, and said it expects to return to the target leverage range in 2028.

Dean Setoguchi framed the quarter around completing two strategic acquisitions: the Plains Canadian NGL business and the remaining 50% of KAPS. He said these deals strengthen Keyera’s integrated value chain and create a platform for disciplined growth, while the company focuses on integration, synergies and growth-project execution. His tone was confident and constructive, emphasizing that the assets are performing well, that project execution is strong, and that the company sees a long runway for basin growth and additional value creation.

Eileen Marikar highlighted the quarter’s financials and the balance-sheet impact of the acquisitions. She cited adjusted EBITDA of $309 million, DCF of $101 million or $0.39 per share, and net earnings of $308 million, while noting fee-for-service strength offset lower marketing contributions. She said net debt to adjusted EBITDA rose to 3.3x because of higher net debt from recent acquisitions and softer first-half marketing, but the company remains focused on deleveraging back into range in 2028. She also reiterated the current synergy target of $120 million to $140 million and said growth is supported by filling system capacity and sanctioned projects, with additional upside from more synergies, capacity optimization and KAPS contracting.

Analysts focused heavily on the Plains acquisition, condensate system capacity, frac-spread hedging, and the size and timing of synergy capture. Management said Plains is performing better than originally modeled across the core pipeline, frac business in Fort Saskatchewan and Empress, but cautioned against annualizing a partial quarter. On condensate, management said it has a well-defined, capital-efficient debottleneck plan for the Fort Saskatchewan system and the Norlite pipeline, and that it is talking to oil sands players about long-term needs. On synergies, management said $90 million was achieved on day 1, with additional G&A, operating, maintenance and logistics synergies still to come, though maintenance costs may rise modestly for 1.5 to 2 years as assets are brought to Keyera’s operating standard.