EnLink Midstream (ENLC) Q1 2024 earnings summary

Executive summary

• Q1 adjusted EBITDA was $337.7 million, up 4.3% YoY; FCFAD was $74.0 million, leverage was 3.3x, and S&P upgraded the credit rating to BBB-.

• Strategy paired scaled midstream operations with Permian growth, Louisiana expansions and CCS development; FY24 adjusted EBITDA guidance was $1.31–$1.41 billion.

Financial highlights

• Revenue was $1,647.9 million vs. $1,767.5 million YoY; operating income was $111.9 million vs. $173.7 million, and net income was $50.0 million vs. $94.2 million.

• Net income attributable to ENLC was $14.5 million vs. $58.2 million; diluted EPS was $0.03 vs. $0.12.

• Adjusted gross margin was $497.5 million vs. $495.6 million; adjusted EBITDA was $337.7 million vs. $323.7 million.

• Operating cash flow was $293.3 million vs. $272.1 million; FCFAD was $74.0 million vs. $5.7 million, marking 18 consecutive quarters of positive FCFAD.

• Lower natural gas and NGL prices reduced product sales, partly offset by higher crude oil and condensate sales; derivative losses rose $40.9 million YoY.

Outlook and guidance

• FY24 adjusted EBITDA guidance was $1.31–$1.41 billion; Tiger II was on track for 2Q24 service, adding ~150 MMcf/d of Permian processing capacity.

• Henry Hub to the River is planned to add ~210 MMcf/d, with ~$70 million capex and Q4 2025 service; the project targets a mid-single-digit EBITDA investment multiple.

• Remaining 2024 capital requirements totaled $350 million, including $340 million of capital expenditures, $9 million of facility relocation costs and $1 million of affiliate contributions; operating cash flows were expected to fund them.

• GCF assets were expected to resume operations in Q3 2024; Matterhorn Express was expected in service in Q3 2024, subject to customary approvals.

• Phase 1 Louisiana renewals covered the vast majority of existing contracts at higher rates and longer terms; Phase 2 advanced through the Henry Hub to the River project.