On August 2, 2024, Plains GP Holdings LP (PAGP, Financial) released its 8-K filing reporting robust second-quarter 2024 results and an upward revision of its full-year 2024 Adjusted EBITDA guidance.
Plains All American provides transportation, storage, processing, fractionation, and marketing services for crude oil, refined products, natural gas liquids, liquefied petroleum gas, and related products. Plains' assets span the United States and Alberta, Canada, but are heavily concentrated in the Permian Basin.
Q2 2024 Financial Highlights
Plains GP Holdings LP (PAGP, Financial) reported net income attributable to PAA of $250 million and net cash provided by operating activities of $653 million for the second quarter of 2024. The company delivered Adjusted EBITDA attributable to PAA of $674 million and generated Adjusted Free Cash Flow of $421 million, excluding changes in assets and liabilities.
In addition, PAGP successfully priced a public offering of $650 million of unsecured senior notes at 5.7% due 2034, further strengthening its financial position.
2024 Guidance Update
Based on its strong performance, Plains GP Holdings LP (PAGP, Financial) raised the mid-point of its full-year 2024 Adjusted EBITDA guidance by $75 million to a new range of $2.725 - $2.775 billion. The company reiterated its full-year 2024 Adjusted Free Cash Flow guidance of $1.55 billion, excluding changes in assets and liabilities.
“Today’s announcements reflect another solid quarter with results exceeding expectations in both the Crude Oil and NGL segments. Based on our performance to-date and outlook for the remainder of the year, we are increasing our annual EBITDA guidance for 2024. This underscores the resilience of our business model and highlights the flexibility of our asset base to capture opportunities in a dynamic and evolving market,” said Willie Chiang, Chairman & CEO of Plains.
Segment Performance
The Crude Oil segment reported a 9% increase in Adjusted EBITDA for Q2 2024 compared to Q2 2023, primarily due to higher tariff volumes on pipelines, tariff escalations, and contributions from acquisitions. The NGL segment saw a significant 52% increase in Adjusted EBITDA, driven by turnarounds impacting sales volumes in Q2 2023 and incremental margins from iso-to-normal butane spread benefits in Q2 2024.
| Segment | Q2 2024 Adjusted EBITDA ($ million) | Q2 2023 Adjusted EBITDA ($ million) | Change (%) |
|---|---|---|---|
| Crude Oil | 576 | 529 | 9% |
| NGL | 94 | 62 | 52% |
Financial Metrics and Analysis
Plains GP Holdings LP (PAGP, Financial) reported a diluted net income per common unit of $0.26 for Q2 2024, down from $0.32 in Q2 2023. The company declared a distribution per common unit of $0.3175, a 19% increase from the $0.2675 declared in the same period last year.
Adjusted net income attributable to PAA was $288 million, up 19% from $243 million in Q2 2023. Adjusted EBITDA increased by 15% to $807 million, and Adjusted Free Cash Flow after distributions was $125 million, down from $404 million in Q2 2023.
Conclusion
Plains GP Holdings LP (PAGP, Financial) has demonstrated strong financial performance in Q2 2024, exceeding analyst estimates and raising its full-year guidance. The company's ability to capitalize on market opportunities and maintain financial flexibility underscores its resilience in the dynamic oil and gas industry. Investors and stakeholders can look forward to continued value generation and strategic growth from Plains GP Holdings LP (PAGP).
Explore the complete 8-K earnings release (here) from Plains GP Holdings LP for further details.
