Kinder Morgan Inc - Class P
Q2 2023 Earnings
Did KMI Beat Earnings? Q2 2023 Results
Kinder Morgan posted a steady but pressured second quarter, reporting earnings per share of $0.26 and revenue of $3.50 billion as lower commodity prices and higher interest expense weighed on year-over-year comparisons, even as results beat the company's internal budget on both Adjusted EBITDA and distributable cash flow. GAAP net income attributable to KMI fell 8% to $586.00 million from $635.00 million a year ago, while revenue declined sharply from $5.15 billion, a drop driven largely by softer commodity prices flowing through cost of sales rather than any operational deterioration. The bright spot was the Natural Gas Pipelines segment, where Adjusted Segment EBDA climbed to $1.20 billion from $1.13 billion on a 5% rise in transport volumes and a 19% surge in gathering volumes. Looking ahead, KMI reaffirmed its full-year 2023 dividend guidance of $1.13 per share but acknowledged it now expects results to finish slightly below its $7.70 billion Adjusted EBITDA budget, entirely attributable to commodity prices tracking below its $85 per barrel crude and $5.50 per MMBtu natural gas assumptions.
- Natural Gas Pipelines segment up on higher contributions from Midcontinent Express Pipeline, Texas Intrastate system, EPNG, Stagecoach and TGP
- Natural gas transport volumes up 5% and gathering volumes up 19% year-over-year
- Jones Act tanker business meaningfully higher on higher average charter rates with fleet fully contracted
- Terminals bulk business benefited from rate escalations and higher coal and fertilizer volumes
- Jet fuel volumes up 9% year-over-year
- CO2 combined net oil production up 7% versus prior year
- Lower commodity prices and higher interest expense offset operational gains
“KMI once again saw the value of its existing natural gas transportation and storage assets that are able to respond to volatile market conditions caused by extreme weather events and an increasingly intermittent resource-based electric grid. Our 700 billion cubic feet (Bcf) of operated natural gas storage capacity is particularly useful in backstopping intermittent renewable electricity resources. Financial contributions from the Natural Gas Pipeline business segment were up relative to the second quarter of 2022 and ahead of budget. Our Terminals business segment also over performed relative to both the second quarter of 2022 and budget.”
Kinder Morgan CEO, on the earnings call
Forward Guidance & Outlook
For 2023, KMI budgeted net income attributable to KMI of $2.5 billion ($1.12 per share), DCF of $4.8 billion ($2.13 per share), Adjusted EBITDA of $7.7 billion, and expects to end 2023 with a Net Debt-to-Adjusted EBITDA ratio of 4.0 times. Dividends are expected at $1.13 per share, a 2% increase from 2022. While on budget year-to-date, the company now expects to finish 2023 slightly below plan on a full-year basis, entirely due to expected lower commodity prices. Crude oil and natural gas prices have been below full-year 2023 budget assumptions of $85/barrel and $5.50/MMBtu, and the NGL-to-crude ratio has been below the budgeted 45%. Strong performance in the overall business is expected to partially offset the weaker pricing.
KMI YoY Financials
KMI Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.