TC Energy boosts dividend as profit jumps

TC Energy Corp. beat fourth-quarter estimates by reporting a profit of almost $1.5 billion due to the high demand for liquefied natural gas (LNG), compared to a $1.4-billion loss a year earlier when it increased cost estimates for its Coastal Gaslink pipeline project.

The Calgary-based company’s income per share increased to $1.41 in the fourth quarter, ended on Dec. 31, compared to a loss of $1.42 in the same period in 2022. The company declared a quarterly dividend of 96 cents per common share for the quarter, up from 93 cents.

In 2023, TC Energy earned $2.8 billion compared to $641 million in 2022.

Chief executive François Poirier said 2023 was one of the company’s “most transformational years” as it reached the mechanical completion of its Coastal Gaslink pipeline project and announced its intention to spin off its liquid pipeline business.

In a conference call, the company also said TC’S “geographical diversity” will help combat the U.S. decision to pause pending export permits for LNG, an announcement made in January.

“Should a pause in LNG exports in the U.S. be extended for a significant period of time, the geographical diversity that our pipelines afford us, may well see opportunities both in Mexico and Canada,” said Stanley Chapman, chief operating officer, said.

He said the U.S. decision impacts 20 or so projects currently undergoing approval, but it won’t impact projects that are already approved and set to come online in the next two years.

For 2024, TC Energy’s comparable earnings per share of $1.35 easily beat analyst expectations of $1.08. Its comparable earnings for the fourth quarter before interest, taxes, depreciation and amortization (EBITDA) of $3.1 billion also beat expectations of $2.8 billion.

The company reported comparable EBITDA of $1.03 billion for its Canadian gas pipelines, which was above Bank of Montreal’s estimate of $810 million, largely due to a $200-million incentive payment for Coastal Gaslink.

TC Energy reaffirmed its 2024 outlook for comparable EBITDA of $11.2 billion to $11.5 billion, but its earnings per common share are expected to be lower than in 2023 due to the sale of some non-controlling equity interests. Its capital expenditures for 2024 are expected to be about $8.5 billion to $9 billion.

“The majority of our 2024 program is focused on the advancement of the Southeast Gateway pipeline project, U.S. Natural Gas Pipelines projects, post-construction and reclamation activities on the Coastal Gaslink pipeline project, the Bruce Power Major Component Replacement (MCR) programs, and normal course maintenance capital expenditures,” TC said.