On July 31, 2024, Hess Midstream LP (HESM, Financial) released its 8-K filing reporting its estimated results for the second quarter of 2024. Hess Midstream LP owns, operates, develops, and acquires a diverse set of midstream assets and provides fee-based services to Hess and third-party customers. It conducts its business through three operating segments: gathering, processing and storage, and terminaling and exporting. The company derives the maximum revenue from the gathering segment.
Performance Overview
Hess Midstream LP (HESM, Financial) reported a net income of $160.3 million for Q2 2024, up from $147.9 million in the same quarter last year. However, net income attributable to Hess Midstream LP was $49.5 million, or $0.59 basic earnings per Class A share, falling short of the analyst estimate of $0.62 per share. The company generated revenues of $365.5 million, surpassing the estimated $365.16 million.
Operational Highlights
Throughput volumes saw significant increases: 19% for gas gathering, 17% for gas processing, 23% for crude oil gathering, and 43% for water gathering compared to the prior-year quarter. This growth was primarily driven by higher production, higher gas capture, and increased system utilization.
Financial Achievements
Adjusted EBITDA for Q2 2024 was $276.5 million, and Adjusted Free Cash Flow was $156.4 million. The company completed an accretive $100 million repurchase of Class B units in June 2024 and increased its quarterly cash distribution to $0.6677 per Class A share, reflecting a $0.0161 increase from the previous quarter.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenues | $365.5 million | $324.0 million |
| Net Income | $160.3 million | $147.9 million |
| Adjusted EBITDA | $276.5 million | $246.8 million |
| Adjusted Free Cash Flow | $156.4 million | $153.0 million |
Balance Sheet and Cash Flow
Net cash provided by operating activities was $271.6 million for Q2 2024. The company issued $600 million in 6.500% fixed-rate senior unsecured notes due 2029, using the proceeds to reduce indebtedness and for general corporate purposes. As of June 30, 2024, Hess Midstream had no drawn balance on its revolving credit facility.
Commentary and Future Outlook
"We delivered strong operational and financial results in the second quarter, driven by Hess Corporation’s Bakken performance, our continued focus on gas capture and solid project execution," said John Gatling, President and Chief Operating Officer of Hess Midstream.
Hess Midstream LP (HESM, Financial) has updated its full-year 2024 guidance, increasing its net income target to $650-$700 million and reiterating its Adjusted EBITDA guidance of $1,125-$1,175 million. The company continues to target at least 5% annual distribution growth per Class A share through 2026 and expects organic throughput volume growth across all systems for 2025 and 2026.
For more detailed financial data and insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Hess Midstream LP for further details.
