January 23, 2025 09:50 GMT
ENERGY SECTOR: Kinder Morgan Q4 Results; Slight Positive
ENERGY SECTOR
KMI Baa2/BBB/BBB
Leverage lower with guidance for further decreases driven by strong EBITDA growth and a growing backlog of projects. Equity moved lower post-close but is now back to flat.
- Q4 EBITDA +7% YoY (-2% vs. cons).
- Q4 OCF USD 1.5bn from USD 2.3bn in Q423 (in line w/ cons). FY USD 5.6bn from USD 6.5bn.
- Q4 FCF of USD 0.7bn from USD 1.7bn in Q423. FY USD 3bn from USD 4.2bn.
- Net debt broadly flat; reported EBITDA leverage of 4x from 4.1x and 4.2x at FY23.
- FY guidance for EBITDA +4%, divs +2%, EBITDA leverage of 3.8x (inclusive of Outrigger deal).
- CEO optimistic around the Trump administration “expediting energy infrastructure projects”.
- Call comments around USD 2.5bn in CapEx over coming years (up from USD 2bn previous estimates) given the current backlog though they later clarified that this will be funded with internal cash gen while reiterating their “opportunistic” view/criteria on M&A.
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