Canada's Rockpoint Q2 net income rises as take-or-pay gains on higher storage rates

Overview

• Canada natural gas storage operator's fiscal Q2 net income rose yr/yr

• Fiscal Q2 adjusted EBITDA increased from prior year

• Quarterly results driven by higher ToP and Optimization revenues, offset by lower short-term storage revenue

Outlook

• Rockpoint plans to deploy up to $150 mln in growth projects through fiscal 2029

• Rockpoint targets 4% to 5% annual EBITDA growth driven by higher storage rates

• Company expects ongoing demand growth and volatility to support storage asset value

Result Drivers

• HIGHER ToP AND OPTIMIZATION REVENUE - Co said increased storage rates, contracted volumes, and greater natural gas price volatility drove higher Take-or-Pay and Optimization revenue

• LOWER SHORT-TERM STORAGE REVENUE - Co said quarterly results were partially offset by a decline in short-term storage service revenue

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil & gas transportation services peer group is "buy"

• Wall Street's median 12-month price target for Rockpoint Gas Storage Inc. is C$33.00, about 39.2% above its November 2 closing price of C$23.71

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 11 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)