Stockwatch...Rockpoint Reports Record Second Quarter 2026 Results and Declares Inaugural Quarterly Dividend
CALGARY, AB, Nov. 5, 2025 /CNW/ - Rockpoint Gas Storage Inc. ("Rockpoint", or the "Company") (TSX: RGSI) today announced its results for the second quarter ended September 30, 2025. All financial figures are presented in United States dollars ("USD"), unless otherwise noted.
On October 15, 2025, Rockpoint successfully closed the largest Canadian initial public offering (the "Offering") on the Toronto Stock Exchange since May 2022, reflecting robust investor demand for ownership in the largest independent pure-play operator of natural gas storage facilities in North America.
Chief Executive Officer Message
"We are pleased to report record second quarter performance, reflecting the quality of our assets, stability of our fee-for-service cash flow and attractive storage spread values in Alberta and California," said Toby McKenna, Chief Executive Officer of Rockpoint.
"In the quarter, our business benefited from enhanced volatility and low natural gas prices, especially in our Alberta markets, led by the start-up of LNG Canada operations coupled with higher production targeting liquids-rich natural gas. We expect these two new trends to continue and contribute to enhanced storage value."
"In addition to the successful Offering, which was significantly oversubscribed, our team continues to progress and execute on various strategic and business initiatives to drive value. We're encouraged by the recent improvements we've made to our capital structure and liquidity and remain focused on advancing our contract profile and business development efforts."
"I am proud of our team for what we've accomplished to date and am excited about Rockpoint's future as a public company. We are committed to delivering safe and reliable natural-gas storage service in our premium storage markets. Rockpoint is well-positioned to benefit from the positive macro backdrop and execute on our strategy to create value over the long-term."
- Rockpoint Gas Storage achieved net earnings of $209 million in the last twelve months ended September 30, 2025, consistent with earnings in fiscal year 2025. Increased Adjusted Gross Margin was offset by a one-time deferred tax benefit recognized in the first half of fiscal 2025.
- Last twelve month Adjusted Gross Margin of $444 million was 8% higher than fiscal year 2025 reflecting strong operational performance and growth in fee for service revenue by a stronger contracting profile and higher contracting fees. This is evidenced by $24 million higher take-or-pay ("ToP") gross margin and $14 million higher optimization gross margin recognized in the period.
- The 13% increase in ToP gross margin compared to fiscal year 2025 is driven by higher per unit fees and slightly higher contracted capacity in California in the first half of fiscal 2026.
- Short-term storage gross margin, net of cost of gas storage services for the last twelve months was relatively consistent with gross margin recognized in fiscal 2025.
- Realized optimization gross margin has increased by 25% for the last twelve months compared to fiscal year 2025 driven by value capture from lower summer prices driving wider seasonal spreads in the first six months of fiscal 2026 in Alberta.
- Fee for service gross margin as a percentage of Adjusted Gross Margin has remained consistent for the last twelve months ended September 30, 2025 and fiscal year 2025 and in-line with our target of 85%.
- Adjusted EBITDA for the last twelve months as at September 30, 2025 of $370 million increased by 9% relative to the fiscal year 2025 comparative period primarily due to the increase in Adjusted Gross Margin described above as operating costs remained relatively consistent.
- Rockpoint Gas Storage achieved quarterly net earnings of $46 million, a 89% increase when excluding a one-time deferred tax benefit in the prior period.
- Second quarter Adjusted Gross Margin of $101 million increased by 22% year-over-year. This was driven primarily by a 25% increase in take-or-pay gross margin in California and 10% higher short-term storage gross margin across the portfolio.
- Adjusted EBITDA of $83 million represents a 27% increase compared to the same period last year. The increase was driven by higher Adjusted Gross Margin in both regions partially offset by certain variable operating costs.
- Distributable Cash Flow in the second quarter increased by 6% over the prior year period to $48 million. The increase was driven by increased Adjusted EBITDA, partially offset by higher interest costs from the Term Loan issued in September 2024.
Strategic & Business Initiatives
- As we enter our open contract season, the Business is experiencing strong early customer engagement for new ToP contracts in both regional markets, with terms and rates tracking in line with management expectations for fiscal 2027 and beyond.
- We continue to focus on advancing several near-term brownfield projects to enhance facility deliverability across our portfolio, and support customers' growing need for greater injection and withdrawal rates.
- We have a strong balance sheet and believe we are well-positioned to fund future growth with approximately $214 million of available liquidity and a conservative Net Debt8 to Adjusted EBITDA leverage multiple of 3.3x, below our target of 3.5x.
- Concurrent with the closing of the Offering, we replaced the existing asset backed loan with a $350 million Revolving Credit Facility bolstering our liquidity and providing more flexibility to support the working capital needs of the business.
- In October 2025, the Business further optimized its capital structure through the successful repricing of its Term Loan, lowering its cost of debt by 50 basis points and generating annual interest savings of over $6 million. The Business also hedged its remaining floating-rate exposure, securing a fixed interest rate of approximately 5.9% through maturity.
- Rockpoint Gas Storage achieved quarterly net earnings of $46 million, a 89% increase when excluding a one-time deferred tax benefit in the prior period.
- Second quarter Adjusted Gross Margin of $101 million increased by 22% year-over-year. This was driven primarily by a 25% increase in take-or-pay gross margin in California and 10% higher short-term storage gross margin across the portfolio.
- Adjusted EBITDA of $83 million represents a 27% increase compared to the same period last year. The increase was driven by higher Adjusted Gross Margin in both regions partially offset by certain variable operating costs.
- Distributable Cash Flow in the second quarter increased by 6% over the prior year period to $48 million. The increase was driven by increased Adjusted EBITDA, partially offset by higher interest costs from the Term Loan issued in September 2024.
Outlook
While the short-term outlook will continue to be shaped by weather and LNG market dynamics, the long-term fundamentals for North America gas storage remain very strong heading into the winter of 2025/26 and our assets are well positioned geographically and operationally.
- Demand growth from Liquified Natural Gas ("LNG") feedgas is expected to tighten North American supply-demand balances this winter which could drive higher prices. LNG feedgas demand averaged 16.3 billion cubic feet per day ("Bcf/d") in the quarter, up 3.9 Bcf/d year-over-year.
- The rapid expansion of AI and data centre infrastructure continues to become a key driver for long-term natural gas demand and volatility due to its reliance on affordable, reliable power generation.
- La Niña conditions across North America are present and are expected to persist through February 2026. These conditions have historically been associated with volatile weather, which could provide price spikes in the cash market driven by cold events.
- In Alberta, high storage inventories in the summer 2025 (calendar year), along with relatively inelastic Western Canadian gas production and downstream pipeline maintenance pressured cash prices creating wide seasonal spreads, further increasing demand for injection. The ramp-up of LNG Canada's Train 1-2 drove volatility which is expected to increase through the winter as they aim to complete their commissioning process.
- California storage inventories were high during the period, which typically provide gas price stabilization to end users absent weather or operational disruption events. California's PG&E Citygate market experienced low demand, reducing spot prices through July before regional pipeline maintenance drove a price rebound.
Overall, we're entering the back half of Fiscal 2026 with solid momentum, supported by strong fundamentals, in-place fee-for-service contracts and are well-prepared to capitalize on market opportunities within the winter months should they occur. Our balance sheet is strong and we've executed on several initiatives, as mentioned, to reduce our cost of capital and improve liquidity, positioning us well going forward.
Dividend Declaration
Subsequent to quarter end, the Board of Directors of Rockpoint Gas Storage Inc. declared a quarterly dividend in the amount of US$0.22 per class "A" common share (a "Class A Share") payable on or about December 31, 2025 to holders of Class A Shares of record as at the close of business on December 15, 2025. This inaugural dividend is in line with the dividend policy targets disclosed in the Company's supplemented PREP prospectus dated October 8, 2025 (the "Prospectus").
Management's Discussion and Analysis and Financial Statements
Rockpoint Gas Storage's Unaudited Combined Consolidated Financial Statements for the three and six months ended September 30, 2025, and 2024 and related Management's Discussion and Analysis have been filed with the Canadian securities regulatory authorities. These documents are available at www.rockpointgs.com/ and on SEDAR+ at www.sedarplus.ca. The Company has also made available certain supplementary information regarding the results for the second quarter ended September 30, 2025, available at www.rockpointgs.com/.
Conference Call and Quarterly Earnings Details
Rockpoint will hold a Conference Call today at 7:30am MT / 9:30am ET. Investors, analysts and other interested parties can access Rockpoint's Second Quarter Fiscal Year 2026 Results, and Supplemental Information, under the Investor Relations section at www.rockpointgs.com/.
To participate in the Conference Call, please dial-in at:
- Toll-Free North America: (800) 715-9871
- Toll-Free International: (646) 307-1963
- Conference ID: 9326759
The Conference Call will also be Webcast live at https://edge.media-server.com/mmc/p/7cxmw6n6.
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