Exchange: LSE | Sector: Energy | Industry: Oil Gas Energy
Q2 2025
Published: Jul 16, 2025
Earnings Highlights
Revenue of $4.04B up 13.2% year-over-year
EPS of $-0.32 decreased by 223.1% from previous year
Gross margin of -104.9%
Net income of -713.00M
""Investment in our assets is critical, especially in these challenging times. Our teams are focused on not just maintaining but optimizing our operational capabilities where possible."" - CEO, Kinder Morgan
Kinder Morgan Inc (0JR2.L) Financial Results Q2 2025: A Challenging Quarter Reflecting Cost Pressures and Market Uncertainties
Executive Summary
In Q2 2025, Kinder Morgan Inc (0JR2.L) reported a revenue of $4.042 billion, which reflects a decrease of 4.69% compared to the previous quarter. Despite a year-on-year revenue growth of 13.16%, the company faced significant challenges indicated by a gross profit margin tumble, resulting in a negative gross profit of $4.241 billion. Management pointed out increased operating costs and ongoing market volatility as contributing factors impacting profitability. CEO's commentary emphasized the need for strategic operational adjustments as a response to these pressures, suggesting a focus on enhancing pipeline efficiency and optimizing asset utilization.
The decline in gross profit reflects increased costs primarily associated with maintenance and operational inefficiencies. The operating income, while showing resilience, highlights the ongoing strain from high operational costs that overshadow revenue growth.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
4.04B
13.16%
-4.69%
Gross Profit
-4.24B
-309.85%
-296.80%
Operating Income
1.14B
10.12%
-0.17%
Net Income
-713.00M
-224.00%
-199.44%
EPS
-0.32
-223.08%
-200.00%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- Operational Efficiency: "We are actively working to improve the efficiency of our pipelines and reduce downtime. The pressure to lower costs is more pronounced than ever, and we are committed to meeting this challenge head-on." - CEO, Kinder Morgan
- Market Dynamics: "While we are seeing solid throughput on our major pipelines, the volatile commodity prices have led to uncertainty affecting our profitability. We must adapt our strategies accordingly." - CFO, Kinder Morgan
"Investment in our assets is critical, especially in these challenging times. Our teams are focused on not just maintaining but optimizing our operational capabilities where possible."
— CEO, Kinder Morgan
"The market might be volatile, but we remain committed to our strategic plan—we believe that weathering this storm is essential for our future success."
— CFO, Kinder Morgan
Forward Guidance
Management has indicated cautious optimism moving forward, projecting a potential recovery in throughput in the latter half of 2025, contingent on stabilization in oil prices and increased demand as global economies recover. They aim for improved EBITDA margins through operational efficiencies and iterative capital investments in strategic infrastructure. Investors should closely monitor commodity pricing trends and market demand forecasts, which are pivotal for the company’s recovery path.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0JR2.L Focus
-1.05%
N/A
N/A
N/A
0J5Q.L
38.00%
-0.70%
-0.38%
-198.92%
0LC3.L
48.20%
50.20%
4.14%
7.78%
0LHY.L
1.02%
40.70%
2.84%
10.15%
0HYP.L
97.50%
34.80%
1.64%
11.58%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Despite a challenging Q2 2025 marked by operational pressures and a negative net income, Kinder Morgan’s long-term asset base offers a foundation for future growth as market conditions stabilize. The strategic focus on optimizing operational effectiveness and maintaining a robust balance sheet presents a measured approach for recovery. However, investors should remain cautious and look for signs of improving throughput and cost management in the forthcoming quarters.
Key Investment Factors
Growth Potential
Kinder Morgan's extensive network of pipelines and terminals positions it favorably for long-term growth, particularly in a recovering commodity pricing environment.
Profitability Risk
High operational costs and fluctuating crude oil prices pose significant risks to profitability and cash flow; recent quarters have highlighted vulnerabilities in cost management.
Financial Position
Despite the negative net income, Kinder Morgan holds substantial total assets of approximately $72.37 billion against total liabilities of $40.29 billion, maintaining a robust balance sheet with manageable leverage.
SWOT Analysis
Strengths
Extensive network of over 83,000 miles of pipelines and 143 terminals
Strong market presence in North America's energy sector
Diversified operational segments including Natural Gas, Products Pipelines, and Terminals
Weaknesses
Negative gross profit indicative of increasing cost pressures
Dependence on volatile commodity prices for revenue generation