Release Date: April 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DT Midstream Inc (DTM, Financial) reaffirmed its 2025 adjusted EBITDA guidance range and 2026 early outlook, indicating confidence in its financial performance.
- The company is successfully integrating newly acquired interstate pipelines, with key integration activities progressing on schedule.
- DT Midstream Inc (DTM) has a $2.3 billion organic growth project backlog, with construction underway on several projects, including the Midwestern Gas Transmission Power Plant lateral.
- The company has no commodity exposure and minimal volume exposure, with 70% of adjusted EBITDA coming from demand-based contracts with strong utility customers.
- DT Midstream Inc (DTM) is well-positioned to benefit from growing LNG demand and utility-scale power generation, particularly in the Gulf Coast and PJM/MISO regions.
Negative Points
- The first quarter of 2025 experienced market volatility, with significant cold weather impacting natural gas prices.
- Adjusted EBITDA is expected to be lower in the second quarter due to seasonality and maintenance activities.
- There was a decrease in gathering volumes in the Northeast, driven by timing of producer activity.
- The company faces potential challenges from tariff announcements, although it expects no material effect due to strategic supplier relationships.
- The broader market uncertainty and potential recession risks could impact future performance, although DT Midstream Inc (DTM) remains confident in its resilience.
Q & A Highlights
Q: Can you explain the significant changes in gathering volumes, particularly the increase in Haynesville and decrease in the Northeast?
A: David Slater, President and CEO, explained that the uptick in Haynesville aligns with the activities of large public producers and increased activity from private operators responding to market signals. The Northeast volumes are consistent with expectations and are expected to ramp up in the second half of the year.
Q: What is the status of projects aimed at supplying data centers?
A: David Slater noted that there is ongoing commercial activity with numerous proposals for data center power demand across their footprint. Both behind-the-meter and utility-scale power generation projects are in advanced commercial discussions.
Q: Can you provide insights into the Millennium pipeline's open season and its potential impact?
A: David Slater highlighted that the open season reflects strong interest in incremental capacity in the Northeast. Millennium is uniquely positioned to leverage existing capacity and assets to meet market demands. This project is not yet included in the backlog, indicating potential future growth.
Q: How do you view the potential impact of macroeconomic uncertainties on your 2025 and 2026 guidance?
A: David Slater emphasized the durability of their portfolio, which has no commodity exposure and minimal volume exposure. Jeff Jewell, CFO, added that their strong balance sheet, with no maturities until 2029 and significant liquidity, supports their confidence in maintaining guidance.
Q: What are your thoughts on the potential for LEAP expansion given recent developments in LNG demand?
A: David Slater stated that LEAP expansions are expected to continue in manageable increments. The recent Woodside FID is a positive catalyst, and while new projects are coming online, the competitive positioning of LEAP remains strong.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
