Plains All American Pipeline LP (PAA) Reports Q3 2023 Earnings, Raises Full-Year Guidance
Plains All American Pipeline LP (NASDAQ:PAA) reported a net income of $203 million, a decrease of 47% compared to the same period last year.
The company's Adjusted EBITDA increased by 6% year-over-year to $662 million.
PAA raised its full-year 2023 Adjusted EBITDA guidance to $2.60 - $2.65 billion, up from the previous estimate of $2.45 - $2.55 billion.
The company announced two bolt-on acquisitions in the Permian Basin for an aggregate cash consideration of approximately $205 million.
On November 3, 2023, Plains All American Pipeline LP (NASDAQ:PAA) released its third-quarter 2023 earnings report. The company reported a net income attributable to PAA of $203 million, marking a 47% decrease compared to the same period in 2022. Despite the drop in net income, PAA delivered strong results with an Adjusted EBITDA of $662 million, a 6% increase year-over-year.
Financial Highlights
The company's diluted net income per common unit was $0.20, a decrease of 58% compared to the same period last year. Net cash provided by operating activities was $85 million, a significant decrease of 91% year-over-year. However, the distribution per common unit declared for the period increased by 23% to $0.2675.
For the first nine months of 2023, the net income attributable to PAA increased by 19% to $918 million compared to the same period in 2022. The diluted net income per common unit also increased by 17% to $1.04.
2023 Guidance and Capital Allocation Updates
PAA raised its full-year 2023 Adjusted EBITDA guidance to $2.60 - $2.65 billion, up from the previous estimate of $2.45 - $2.55 billion. The company also announced its intention to recommend to the Board of Directors an annualized increase of $0.20 per unit to PAA's and PAGPs fourth-quarter 2023 distribution payable in February 2024, representing a 19% increase.
Permian Bolt-on Acquisitions
PAA announced two bolt-on acquisitions in the Permian Basin. Subsidiaries of Plains Oryx Permian Basin LLC acquired Rattler Midstreams Southern Delaware Basin crude oil gathering system and LM Energys Northern Delaware Basin Touchdown crude oil gathering system for an aggregate cash consideration of approximately $205 million.
CEO Commentary
Willie Chiang, Chairman & CEO of Plains, commented on the results,
Todays announcements include strong quarterly results contributing to an upward revision of our full-year EBITDA guidance. We closed two bolt-on acquisitions that complement our existing portfolio and enhance the service offering of our Permian JV. Our strong performance and positive outlook for our business combined with the contribution from recent bolt-on transactions underpins our intent to recommend to our Board a 19% increase in the annualized distribution rate for the distribution payable in February 2024. We remain committed to operating with a strong balance sheet that can withstand various commodity cycles and consistent with this objective, we are reducing our long-term leverage ratio target range."
Explore the complete 8-K earnings release (here) from Plains All American Pipeline LP for further details.
This article first appeared on GuruFocus.
