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Sep 30, 2024
Kinetik Q3 2024 Earnings Report
Kinetik reported record third quarter results, exceeding expectations with increased Adjusted EBITDA and raised full-year guidance.
Key Takeaways
Kinetik Holdings Inc. reported a strong third quarter in 2024, with a 94% increase in net income year-over-year and a 23% increase in Adjusted EBITDA. The company raised its full-year Adjusted EBITDA guidance and tightened its Capital Expenditures guidance. Kinetik also increased its quarterly cash dividend and expanded its equity interest in EPIC Crude Holdings, LP.
Net income increased by 94% year-over-year to $83.7 million.
Adjusted EBITDA increased by 23% year-over-year to $265.7 million.
Full-year Adjusted EBITDA guidance raised to $970 million to $1 billion.
Increased quarterly cash dividend to $0.78 per share, up 4% versus the prior quarterly dividend.
Kinetik
Kinetik
Forward Guidance
Kinetik is increasing its Adjusted EBITDA guidance range to $970 million to $1 billion and tightening its Capital Expenditures Guidance range to $270 million to $290 million.
Positive Outlook
- Employees are aligned on achieving the top end of the Adjusted EBITDA guidance range.
- Outperformance year-to-date.
- Large Lea County customer MVC step-up and treating services commencing.
- Return of curtailed volumes during the fourth quarter.
- Board of Directors’ decision to raise the quarterly cash dividend due to increased confidence in Kinetik’s outlook and the achievement of 3.5x leverage target.
Challenges Ahead
- Construction on the 200 Mmcf/d Kings Landing Cryo I is expected to be operational in the second quarter of 2025.
- Nearly 170 Mmcf/d of wellhead gas volume curtailments on our system in response to low Waha Hub prices.
- Construction on the low- and high-pressure gas gathering and processing project in Eddy County, New Mexico, which is expected to begin in December 2024.
- New intrabasin large diameter, high-pressure rich gas pipeline connecting the west side of the Company’s system in Eddy County, New Mexico to Culberson County, Texas, with expected in-service in the first quarter of 2026.
- Final investment decision as soon as possible given the processing capacity needed to facilitate producer development plans in the Northern Delaware.