AltaGas reported largely in-line second quarter results with a modest 0.3% stock uptick, reflecting balanced operational progress offset by notable execution challenges and increased costs on the REEF project that pressured margins and cash flow visibility.
- Normalized EBITDA rose 14% to $391 million and normalized EPS increased 15% to $0.31 year-over-year, driven by strong Midstream and Utilities performance.
- Midstream throughput grew, with Montney volumes up 8% and LPG exports hitting a record 144,000 barrels per day (+13%), supported by favorable export spreads and sale premiums.
- REEF LNG project is 85% complete but faced significant in-water construction delays and cost overruns (+12% to $1.5 billion capex) due to extreme weather and marine conditions, pushing onsite commissioning into Q1 2027.
- Balance sheet remains healthy with leverage at 4.4x, below the target range, but increased REEF costs raise medium-term execution risks.
- Utilities advanced modernization programs with over $200 million capital deployed and 21 miles of pipe replaced, supporting expected 10% rate base growth in 2026.
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