Antero Midstream Corporation (NYSE:AM), a leading midstream energy company, has reported its financial and operational results for the first quarter of 2024, showcasing its ability to navigate the dynamic energy landscape and deliver consistent performance.
Financials
The company's annual net income for the fiscal year 2023 stood at $371,786,000, while its annual revenue reached $1,112,443,000. Antero Midstream's annual operating cash flow was $779,063,000, and its annual free cash flow amounted to $595,064,000. These robust financial metrics demonstrate the company's strong operational efficiency and its commitment to creating value for its shareholders.
Q1 2024 Performance
In the first quarter of 2024, Antero Midstream continued to build on its momentum, reporting record-breaking results. The company's gathering and processing volumes increased by 4% and 6%, respectively, compared to the same period in the previous year. This growth was driven by the company's strategic asset optimization initiatives, including the successful completion of the Grays Peak compressor station, which was placed online slightly ahead of schedule and on budget.
The company's water handling segment also exhibited operational efficiencies, with Antero Midstream delivering 113,000 barrels per day of freshwater to its primary customer, Antero Resources, during the first quarter. This represents a 35% improvement in water delivery compared to the same period in the previous year, despite Antero Resources running fewer completion crews on average.
Antero Midstream's financial performance in the first quarter was equally impressive, with the company reporting double-digit EBITDA growth and a double-digit decline in capital expenditures year-over-year. This combination resulted in a company record of $182 million in free cash flow before dividends and $74 million in free cash flow after dividends, both of which were used to reduce the company's absolute debt during the quarter.
Outlook
The strong first quarter results have positioned Antero Midstream well to achieve its full-year 2024 guidance. The company expects modest throughput growth in the second quarter, offset by lower fresh water delivery volumes as Antero Resources reduces its completion crews to one in February, in line with the company's full-year guidance.
Strategic Focus
Antero Midstream's strategic focus on asset optimization, operational efficiency, and disciplined capital allocation has been a key driver of its success. The company's integrated planning with its primary customer, Antero Resources, has allowed it to maximize project returns and maintain a peer-leading return on invested capital.
Furthermore, Antero Resources' premium natural gas price realizations, driven by its firm transportation portfolio directly into the heart of the LNG corridor, have provided additional stability and visibility to Antero Midstream's business. With several new LNG facilities expected to come online in the coming years, Antero Resources' ability to access these premium-priced markets solidifies Antero Midstream's position as a critical first-mile infrastructure provider to supply LNG across the globe.
Liquidity
Antero Midstream's liquidity position remains strong, with the company on track to achieve its 3x leverage target in the back half of 2024, nearly 1.5 years ahead of its initial target. This positions the company to pursue incremental return of capital to shareholders, including through its previously announced $500 million share repurchase program.
Conclusion
The company's focus on operational excellence, financial discipline, and strategic alignment with its customer has positioned Antero Midstream for continued success. As the energy industry navigates the evolving landscape, Antero Midstream's ability to adapt and deliver consistent performance makes it a compelling investment opportunity for investors seeking exposure to the midstream sector.