Keyera Announces 2025 Third Quarter Results

Executive Summary

• Keyera Corp. reported third-quarter 2025 financial results, showing a decline in adjusted EBITDA and net earnings year-over-year, primarily driven by lower contributions from the Marketing segment.
• The company finalized financing for its acquisition of Plains' Canadian NGL business, issuing $2.3 billion in senior notes and $500 million in hybrid notes, with the transaction expected to close in Q1 2026.
• Keyera updated its 2025 guidance, lowering the Marketing segment realized margin forecast to $280–$300 million (from $310–$350 million) and reducing growth capital expenditure expectations, while maintaining confidence in its long-term fee-based EBITDA growth targets.

Key Details

• Financial Performance (Q3 2025 vs Q3 2024):
  • Adjusted EBITDA: $281 million (down from $322 million); excluding transaction costs, adjusted EBITDA was $286 million.
  • Distributable Cash Flow (DCF): $181 million ($0.79/share), down from $195 million ($0.85/share); excluding transaction costs, DCF was $186 million ($0.81/share).
  • Net Earnings: $85 million, down from $185 million.
  • Dividends Declared: $123.8 million ($0.54/share), up from $119.2 million ($0.52/share).
  • Payout Ratio: 68% (67% adjusted for acquisition costs).
• Segment Results:
  • Gathering and Processing: Realized margin of $112 million (up from $99 million), driven by higher throughput and ramp-up of Wapiti and Simonette gas plants.
  • Liquids Infrastructure: Realized margin of $147 million (up from $135 million), driven by higher storage/pipeline utilization in the condensate system and KAPS volume ramp-up.
  • Marketing: Realized margin of $73 million (down from $135 million), due to lower liquids blending contributions, reduced condensate imports, and weaker iso-octane premiums.
• Guidance Updates:
  • 2025 Marketing Realized Margin: Revised down to $280–$300 million (previously $310–$350 million).
  • 2025 Growth CapEx: Revised down to $220–$240 million (previously $275–$300 million).
  • 2025 Maintenance CapEx: Revised down to $60–$70 million (previously $70–$90 million).
  • 2025 Cash Taxes: Revised down to $90–$100 million (previously $100–$110 million).
  • 2026 Stand-alone Growth CapEx: Expected between $400–$475 million.
  • 2026 Stand-alone Maintenance CapEx: Expected between $130–$150 million.
• Plains Acquisition:
  • Financing finalized with $2.3 billion in senior notes and $500 million in hybrid notes.
  • Regulatory reviews are advancing; expected closing in Q1 2026.
  • Net debt to adjusted EBITDA ratio stood at 1.7 times at quarter-end (below the 2.5–3.0x target range).
• Project Updates:
  • KFS Frac II Debottleneck: On track for mid-2026 completion, on budget at ~$85 million.
  • KFS Frac III Expansion: On track for mid-2028 in-service, on budget at ~$500 million.
  • KAPS Zone 4: On track for mid-2027 in-service, on budget with net cost of ~$220 million.
  • Contracted volumes for KAPS Zones 1-4 now carry a weighted average duration of over 12 years, with ~75% take-or-pay commitments.
• Operational Metrics:
  • Gross processing throughput (G&P): 1,537 MMcf/d (vs 1,415 MMcf/d in Q3 2024).
  • Net processing throughput (G&P): 1,420 MMcf/d (vs 1,259 MMcf/d in Q3 2024).
  • Gross processing throughput (Liquids): 156 Mbbl/d (vs 150 Mbbl/d in Q3 2024).
  • Net processing throughput (Liquids): 90 Mbbl/d (vs 85 Mbbl/d in Q3 2024).
  • AEF iso-octane production: 14 Mbbl/d.
  • Marketing sales volumes: 228,200 Bbl/d (vs 215,300 Bbl/d in Q3 2024).
• Sustainability:
  • Met 2025 GHG emissions intensity reduction target of 25% (Scope 1 and 2) in 2024, one year ahead of schedule.

Notable Quotes

• "Our year-over-year growth reflects the consistent strength and competitiveness of our integrated platform as we continue to contract and fill available capacity across our system," said Dean Setoguchi, President and CEO. "Looking ahead, we are continuing to execute our strategy to extend and strengthen our value chain by advancing our growth projects and completing the transformative acquisition of Plains' Canadian NGL business, resulting in greater value for our customers and shareholders."
• "We remain confident in the outlook for our iso-octane business. With slower-than-expected adoption of electric vehicles, evolving government incentive structures, and an increasing share of new internal combustion engines requiring high-octane gasoline for performance and efficiency, the structural fundamentals of this business remain strong." — Dean Setoguchi