TC Energy Corporation hosted its annual Investor Day on November 29th. During the event, the company outlined its corporate strategy, emphasizing its continued approach to delivering long-term shareholder value while carefully managing the broad range of opportunities ahead. TC Energy reaffirms his EBITDA growth of 6% by 2026 and his long-term equivalent EBITDA growth outlook of 3-5% annual dividend growth.
Francois Poirier, President and CEO of TC Energy, said: “We are leveraging our extensive North American footprint to expand and expand our range of services to meet the evolving energy mix and customer needs.”
TC Energy has announced a comparable EBITDA outlook for 2023 that is expected to be 5-7% higher than 2022. Despite the difficult market environment, the company’s business remains resilient and continues to deliver strong results. Approximately 95% of the projected equivalent EBITDA is under long-term take-or-pay contracts and/or rate regulation, which provides insulation against rising inflation and interest rates. Additionally, about 85% of their long-term debt is fixed rate, with a weighted average maturity of about 20 years and a weighted average coupon of 4.8%.
TC Energy’s secured capital program is expected to be primarily funded by a combination of cash flow growth, long-term debt growth, hybrid capacity and other capital sources. TC Energy’s funding requirements above the C$5 billion to C$7 billion annual capital expenditure target range will be funded through his C$5 billion+ flexible divestiture program, which is expected to be completed during 2023. I look forward to procuring it. Through 2026 will be determined by the timing and earnings of monetized assets, along with contributions from projects that have not yet been licensed. However, the additional financial flexibility created through this process will strengthen our strategic position to deliver shareholder value over the medium to long term. TC Energy remains committed to ending its discounted dividend reinvestment program with the quarterly dividend declaration ending June 30, 2023.
Coastal GasLink project update
With regard to the Coastal GasLink project, TC Energy continues to face significant cost pressures related to labor costs and skilled labor shortages, contractor underperformance and disputes in western Canada. The project has also been affected by other unforeseen events such as drought conditions, erosion and sediment control challenges. As a result, TC Energy now anticipates a significant increase in project costs and corresponding funding requirements for TC Energy. TC Energy is actively pursuing cost mitigation and potential recoveries from contractors to offset some of these costs, some of which will be finalized after project completion. may not be TC Energy plans to provide updated capital cost estimates in early 2023. It incorporates a range of recent developments.
The project is now 80% complete overall and TC Energy continues to target mechanical completion by the end of 2023. TC Energy is committed to the highest levels of employee safety, along with the communities and environments in which TC Energy works. This is their primary commitment above all else.
“While Phase 1 of Coastal GasLink faced cost performance challenges, we do not expect this to impact the sustainability of our 3-5% dividend growth rate and our ability to accelerate our deleveraging target from 2026. We do,” said Poirier. “We continue to see long-term value in the Coastal GasLink project for WCSB, our customers, and the community across the project route.”
Read article online: https://www.worldpipelines.com/project-news/30112022/tc-energy-growth-outlook-and-coastal-gaslink-project-update/