Kinder Morgan, Inc. has announced that its board of directors approved a cash dividend of US$0.25 per share for the second quarter (US$1 annualised) payable on 15 August, 2019, to common stockholders of record as of the close of business on 31 July, 2019. KMI is reporting second quarter net income available to common stockholders of $518 million, compared to a net loss of US$180 million in the second quarter of 2018; and distributable cash flow (DCF) of US$1.128 million, a 1% increase over the second quarter of 2018.
“The dividend we announce today represents a 25% increase over the fourth quarter 2018 dividend, as we continue to deliver on the dividend growth plan we outlined two years ago,” said Richard D. Kinder, Executive Chairman.
“During the second quarter, we maintained discipline by continuing to fund growth capital through operating cash flows without accessing capital markets. In addition, Fitch Ratings recognised our strengthened balance sheet as it joined other ratings agencies in upgrading our credit rating. In short, the company had another strong quarter and the future is bright,” said Chief Executive Officer Steve Kean.
“These are exciting times for Kinder Morgan, with booming U.S. natural gas and oil production projected to grow more than 30% through 2030,” continued Kean. “Our North American footprint positions us extremely well in both the near and long term as a leading infrastructure provider for those and other essential energy products.”
Kean added, “One of the foundations for our future growth is the fact that our network connects key natural gas supply basins to robust and growing demand points along the Gulf Coast. More than 70% of the forecasted U.S. natural gas demand growth between 2018 and 2030 is expected to be in Texas and Louisiana, where we already have significant assets in place and key growth projects in our backlog.”
“Led by the Natural Gas Pipelines segment, our commercial, financial, and operating performance in the second quarter was very strong,” said KMI President Kim Dang. “We generated second quarter earnings per common share of US$0.23, compared to an US$0.08 loss per common share in the second quarter of 2018. At US$0.50 per common share, DCF per share was flat to the second quarter of 2018, with US$559 million of excess DCF above our declared dividend.
“We also made excellent progress on our Gulf Coast Express Pipeline project and defeated a court challenge to our Permian Highway Pipeline project. We look forward to completing both of those projects as they are critical to the development of resources in the Permian Basin,” continued Dang.
As noted above, KMI reported second quarter net income available to common stockholders of US$518 million, compared to a net loss of US$180 million for the second quarter of 2018, and DCF of US$1.128 million, up from US$1.117 million for the comparable period in 2018. These increases were due to greater contributions from the Natural Gas Pipelines segment and lower financing costs, partially offset by the elimination of the Kinder Morgan Canada business segment following the Trans Mountain sale and lower commodity prices impacting our CO2 segment. Net income also improved year-over-year due to non-cash impairments taken during the second quarter of 2018.
KMI’s project backlog for the second quarter stood at US$5.7 billion, US$400 million less than the first quarter of 2019, with additions of approximately US$400 million in new projects, primarily in the Natural Gas Pipelines segment, offset by approximately US$800 million in projects placed in service and other project capital adjustments. Excluding the CO2 segment projects, KMI expects projects in the backlog to generate an average Project EBITDA multiple of approximately 5.6 times.
For the first six months of 2019, KMI reported net income available to common stockholders of US$1.074 million, compared to US$305 million for the first six months of 2018, and DCF of US$2.499 million, up 6% from US$2.364 million for the comparable period in 2018. Net income for the first six months also improved year-over-year due primarily to the non-cash impairments taken during the second quarter of 2018.
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