Plains All American Pipeline on Friday announced solid financial results for the third quarter, with net income attributable to the company of $220 million and net cash provided by operating activities of $692 million.

The company also reported adjusted Ebitda of $659 million for the quarter, maintaining a strong operational footing despite challenges in its natural gas liquids business. The company did not offer much guidance for 2025.

Chairman and CEO Willie Chiang highlighted the company's continued progress on its efficient growth strategy, which includes capital allocation and a focus on long-term free cash flow generation.

"We delivered solid operational and financial results in the third quarter and are increasingly confident in the durability and cash-generating potential of our asset base," Chiang said. "Our improved outlook for the year bolsters our return of capital framework, which we believe will continue creating value for unit holders."

Plains' crude oil segment saw a 4% year-over-year increase in adjusted Ebitda, largely driven by higher tariff volumes on its pipelines, tariff escalations, and contributions from recent acquisitions. However, the company's NGL segment faced a more challenging quarter, with a 26% decline in adjusted Ebitda compared with the same period in 2023. Plains attributed the decline to lower frac spreads, which hindered the profitability of the NGL business.

NGLs, which include ethane, propane, and butanes, have been volatile for Plains due to fluctuations in frac spreads, which is the difference between the price of NGLs and the cost of producing them. While Plains has a well-established network of NGL pipelines and fractionation facilities, lower frac spreads in the third quarter led to diminished margins for the segment.

Plains remained optimistic about its long-term outlook, citing expectations to be toward the high end of its full-year 2024 adjusted Ebitda guidance, which is now projected at $2.725 billion-$2.775 billion. Additionally, the company anticipates approximately $1.45 billion in adjusted free cash flow for the year, excluding changes in assets and liabilities, bolt-on acquisition capital, and legal settlements.

In other key highlights, Plains exited the quarter with a leverage ratio of 3.0x, below its target range of 3.25x-3.75x, demonstrating continued progress in reducing debt. The company also received a credit upgrade from Moody's, improving its rating from Baa3 to Baa2 with a stable outlook. Plains now holds mid-BBB ratings from all three major credit rating agencies, further strengthening its financial position.

As addressed on its earnings call, in the quarter, Plains resolved the remaining material claims related to its Line 901 incident with two lawsuit settlements, resulting in a $120 million charge to earnings. In 2015, a failure on Line 901 offshore California near Refugio State Beach resulted in a large-scale oil spill in a biologically diverse part of the U.S. West Coast.

Looking ahead, Plains is focused on executing its growth strategy, which includes a recent small acquisition of a Permian gathering system and continuing to return capital to investors while maintaining financial flexibility.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Alan Lammey, alammey@opisnet.com; Editing by Jessica Marron, jmarron@opisnet.com

(END) Dow Jones Newswires

November 08, 2024 11:52 ET (16:52 GMT)

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