Antero Midstream Corp ((AM)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Antero Midstream Corp’s recent earnings call conveyed an overall positive sentiment, highlighting the company’s robust financial performance in 2024. The company reported record EBITDA and free cash flow, significantly reduced debt, and initiated share repurchases. Looking ahead, Antero Midstream is optimistic about 2025, anticipating further growth in EBITDA and increased free cash flow, despite challenges such as the Veolia lawsuit and limited growth in water volumes. The focus remains on financial growth and operational efficiency.
Record EBITDA and ROIC in 2024
Antero Midstream Corporation reported a remarkable $1.05 billion in EBITDA for 2024, marking its tenth consecutive year of EBITDA growth. The company also achieved a record Return on Invested Capital (ROIC) of 19%, reflecting its efficient capital management and operational success.
Significant Free Cash Flow Growth
The company reported $250 million in free cash flow after dividends for the full year 2024, setting a new company record. This represents a substantial 91% year-over-year increase in free cash flow for the fourth quarter, underscoring Antero Midstream’s strong cash generation capabilities.
Debt Reduction and Share Repurchases
During the fourth quarter, Antero Midstream reduced its debt by over $50 million and successfully met its leverage target. Additionally, the company initiated a share repurchase program, buying back nearly $30 million in shares, demonstrating its commitment to returning value to shareholders.
Capital Budget and Efficiency Initiatives
For 2025, Antero Midstream has allocated a capital budget of $170 million to $200 million, with a focus on efficiency. Projects like the Torrey Speed compressor station, which saved approximately $25 million, exemplify the company’s commitment to cost-effective operations and strategic investments.
Positive 2025 Outlook
Looking forward, the company projects mid-single-digit EBITDA growth and expects to generate between $250 million and $300 million in free cash flow after dividends in 2025, representing a 10% year-over-year increase at the midpoint. This outlook reflects Antero Midstream’s confidence in its growth strategy and operational effectiveness.
Veolia Lawsuit and Uncertain Outcome
The ongoing Veolia lawsuit introduces an element of uncertainty, with potential impacts on cash flow tied to the appeal process’s outcome. The company remains attentive to this issue as it navigates its legal challenges.
Limited Growth in Water Volumes
Despite servicing more wells, Antero Midstream anticipates that water volumes will remain largely unchanged year-over-year in 2025, with no significant growth expected. This situation poses a challenge in terms of revenue generation from this segment.
Forward-Looking Guidance
In its forward-looking guidance, Antero Midstream detailed several key metrics for 2025, including a projected mid-single-digit EBITDA growth driven by throughput increases. The capital budget is set between $170 million and $200 million, with specific allocations for organic capital and joint venture investments. The company also plans to maintain a $0.90 per share dividend and prioritize share repurchases and debt reduction with its free cash flow.
In conclusion, Antero Midstream Corp’s earnings call painted a positive picture of its financial health and strategic direction. The company is poised for continued growth and operational efficiency in 2025, despite facing certain challenges. Investors can anticipate robust financial performance, underscored by record-setting figures in EBITDA and free cash flow and a commitment to shareholder value through dividends and share buybacks.
