Keyera: revenue up a third, but profit turned negative and leverage stands at 8.9x EBITDA

In its Q3 2026 report Keyera posted revenue of 1,736.8m, up 33.8% year on year, but EBITDA fell 43.3% to 104.7m and net profit turned to a loss of 48.2m against a profit of 61.8m a year earlier. The quarterly EBITDA margin was 6.0% versus 14.2% a year earlier, and net debt at end-September stood at 5,715.2m, equal to 8.9x trailing-twelve-month EBITDA. Our conclusion: rather unattractive – on the portal's model the share's fair value is 25% below the current price. Our view: the share is rather unattractive at the current price; upside on the portal model -25%.

Our view: is there upside

Our view in numbers

Key takeaways

— Revenue grew 33.8%, but growth slowed from 48.6% a quarter earlier

— EBITDA fell 43.3% and the margin compressed from 14.2% to 6.0%

— The 48.2m net loss came on positive EBITDA of 104.7m

— Operating cash flow turned negative at 21.6m against capex of 267.9m

— Net debt of 5,715.2m equals 8.9x trailing-twelve-month EBITDA

— The 4.2% dividend yield does not cover the cost of capital at a loss

— EV/EBITDA of 21.0 versus a three-year average of 12.3 – a 71% premium to its own history

Key figures, USD bn

Revenue grew 33.8%, but growth slowed from 48.6% a quarter earlier

In Q3 2026 Keyera's revenue was 1,736.8m, up 33.8% on Q3 2025. That is solid growth, but in Q2 2026 it was higher at 48.6%. The deceleration of 14.8 percentage points shows the pace of expansion is slowing.

The absolute level of revenue was almost flat versus Q2 2026: 1,736.8m against 1,728.8m. The company held its scale but did not add to it. For a company with high leverage, that means operating leverage is not working in its favour.

Trailing-twelve-month revenue was 5,600.0m. That is the base against which leverage and multiples are measured. On that revenue and LTM EBITDA of 640.9m, the EBITDA margin is about 11.4% – well below the levels seen in some quarters of last year.

EBITDA fell 43.3% and the margin compressed from 14.2% to 6.0%

Q3 2026 EBITDA was 104.7m against 196.8m a year earlier – a fall of 43.3%. With revenue up 33.8%, costs grew faster than revenue. The EBITDA margin compressed from 14.2% to 6.0%, more than halving.

Operating profit for the quarter was just 7.5m – less than half a percent of revenue of 1,736.8m. A year earlier operating profit was 130.6m. Such a fall in operating profit on rising revenue points to a sharp increase in operating costs that could not be passed through into price.

For comparison, in Q2 2026 EBITDA was 410.2m on revenue of 1,728.8m, a margin of about 23.7%. The gap between the two quarters is enormous on almost identical revenue. That shows the result is highly sensitive to the cost structure or to one-off factors not disclosed in the report.

The 48.2m net loss came on positive EBITDA of 104.7m

Q3 2026 net profit was negative – minus 48.2m against a profit of 61.8m a year earlier, a fall of 178.0%. The loss came on positive EBITDA of 104.7m and operating profit of 7.5m, so the result was dragged below the operating line by interest and other items.

The quarterly net margin was minus 2.8% against plus 4.8% a year earlier. The sign flipped not because of an operating collapse – EBITDA remains positive – but because of financial expenses and possibly other charges not detailed in the data provided.

Over the last twelve months net profit remains positive at 149.4m. But the quarterly loss of 48.2m eats about a third of that result. If margin pressure persists, the annual figure could turn negative.

Operating cash flow turned negative at 21.6m against capex of 267.9m

Q3 2026 operating cash flow was minus 21.6m – the company spent more cash on operations than it took in. A year earlier the flow was positive at 125.7m. The 147.3m swing came on positive EBITDA of 104.7m, meaning working capital or other payments absorbed the entire operating profit.

Capex for the quarter was 267.9m, almost 2.5 times the year-earlier 59.8m. Combined with negative operating cash flow, this means the company funded investment from borrowings or accumulated cash.

Over the last twelve months operating cash flow is positive at 198.9m, but that is 2.9 times less than capex in Q3 alone. Free cash flow over twelve months at such investment rates remains in question.

Net debt of 5,715.2m equals 8.9x trailing-twelve-month EBITDA

Net debt at 30 September 2026 was 5,715.2m. Against trailing-twelve-month EBITDA of 640.9m that gives a net debt to EBITDA ratio of 8.9x. That is a high level: the company owes almost nine years of EBITDA, which limits financial flexibility.

With market capitalisation of 10,675.7m, net debt is about 35% of the sum of capitalisation and debt. That means a significant part of the company's value sits in debt obligations rather than equity.

A net debt to EBITDA ratio of 8.9x is a level at which interest on debt becomes a heavy burden. With quarterly EBITDA of 104.7m and net financial expenses that pushed profit into negative territory, debt service is already absorbing the entire operating result.

The 4.2% dividend yield does not cover the cost of capital at a loss

The trailing-twelve-month dividend yield is 4.2%. That is lower than one might expect from a company with this level of debt and earnings volatility. With a net loss of 48.2m in Q3, dividend payments are not funded from current profit.

Our estimate: if the current dividend policy holds and trailing-twelve-month net profit stays positive at 149.4m, the annual dividend may remain close to the current level. But if the quarterly loss repeats, twelve-month profit could fall below 100m, and then the payout becomes a question.

A 4.2% yield, with the key rate not given in the data, offers no clear advantage. For a company with net debt to EBITDA of 8.9x and a falling margin, the dividend is more compensation for risk than an attractive yield.

EV/EBITDA of 21.0 versus a three-year average of 12.3 – a 71% premium to its own history

The trailing-twelve-month EV/EBITDA multiple is 21.0 against a three-year average of 12.3. That is a 71% premium to the company's own history. The share is priced richer than usual even as profit and margin have deteriorated.

The trailing-twelve-month P/E is 71.5. That level reflects low net profit of 149.4m against a market capitalisation of 10,675.7m. If profit falls, the multiple will rise further, making the valuation even less attractive.

On the portal's model, re-pricing EBITDA to current commodity prices at the target EV/EBITDA puts the share's fair value 25% below the current market price. This is our own calculation, not a market consensus. It indicates that the current price leaves no margin of safety.

Valuation on the latest reported figures

Bottom line

The strong part of the report is revenue: 1,736.8m, up 33.8% year on year, as the company held its business scale. But that growth did not turn into profit: EBITDA fell 43.3%, the margin compressed to 6.0%, and net profit turned to a loss of 48.2m. Operating cash flow was negative, capex rose to 267.9m, and net debt of 5,715.2m equals 8.9x EBITDA. The EV/EBITDA multiple of 21.0 against a three-year average of 12.3 is a 71% premium to its own history, and on the portal's model fair value is 25% below the current price. Our conclusion: rather unattractive – on the portal's model the share's fair value is 25% below the current price. Our view: the share is rather unattractive at the current price; upside on the portal model -25%.