Kinder Morgan Canada Releases Q2 Results and Declares Dividends

Kinder Morgan Canada Limited (TSX:KML) has released its Q2 results, which featured a net income decrease of C$11.4 million from Q1. During the three month period that makes up Q2 Kinder Morgan penned a multibillion deal with the Canadian government for the Trans Mountain pipeline.

Kinder Morgan Canada owns an interest in or operates an integrated network of pipeline systems and terminal facilities across Canada.

As quoted from the press release:

“KML had a strong second quarter due to its diverse portfolio of fee-based assets and stable cash flows,” said KML board chairman and CEO Steve Kean.

While KML reported second quarter net income of C$13.7 million, down from C$25.1 million in the second quarter of 2017, Adjusted EBITDA was C$107.8 million, up from C$91.5 million in the previous period, and distributable cash flow (DCF) was C$91.8 million, up 16 percent compared to the second quarter of 2017. DCF for the quarter benefited from greater contributions from both the pipelines and terminals segments versus the second quarter of 2017, offset by the payment of preferred share dividends.  Net income was impacted by an increase in Certain Items for the period, driven primarily by the non-cash write-off of capitalized KML credit facility fees.

KML’s 2017 credit facilities were terminated and replaced with temporary credit facilities due to the pending sale of the Trans Mountain Pipeline System and the Trans Mountain Expansion Project (TMEP) announced on May 29, 2018.

In the second quarter, KML generated earnings per restricted voting share of C$0.02, and produced DCF of C$0.259 per restricted voting share relative to our declared C$0.1625 per restricted voting share dividend, resulting in C$10.1 million of excess DCF coverage above the company’s dividend.

For the first half of 2018, KML generated net income of C$58.1 million, Adjusted EBITDA of C$205.8 million, and DCF of C$168.8 million.  As of the end of the quarter, TMEP spend totalled approximately C$1.3 billion on a cumulative basis.

Click here to read the full press release