Aris Water Solutions Inc (ARIS) Reports Strong 2023 Financial Results and Positive 2024 Outlook
Net Income: $13.0 million for Q4 2023, up from $5.4 million in Q4 2022.
Adjusted EBITDA: Increased by approximately 17% to $175.0 million for the full year 2023.
Operating Cash Flow: Grew by approximately 162% to $183.9 million in 2023.
Capital Expenditures: Decreased to approximately $156 million for the full year 2023.
Liquidity: Approximately $329 million in total available liquidity as of December 31, 2023.
Dividend: Declared a Q1 2024 dividend of $0.09 per share, payable on March 21, 2024.
Water Recycling: Over 118 million barrels of recycled produced water in 2023, an 8% increase YoY.
On February 28, 2024, Aris Water Solutions Inc (NYSE:ARIS) released its 8-K filing, detailing the company's financial and operational performance for the fourth quarter and full year of 2023, along with providing an outlook for 2024. Aris Water Solutions Inc is an environmental infrastructure and solutions company that specializes in water handling and recycling for the oil and gas industry, helping customers to reduce their water and carbon footprints.
2023 Performance Highlights and Future Outlook
Aris Water Solutions Inc reported a net income of $13.0 million for the fourth quarter of 2023, a significant increase from the $5.4 million reported in the fourth quarter of 2022. The company's full-year net income also saw a substantial rise to $43.4 million in 2023, compared to $4.8 million in the previous year. Adjusted Net Income for the year was $52.4 million, up from $44.1 million in 2022.
The company's Adjusted EBITDA for the fourth quarter of 2023 was $49.3 million, a 37% increase from the same period in the previous year. For the full year, Adjusted EBITDA reached $175.0 million, marking a 17% improvement over 2022. This growth in profitability is a testament to Aris's operational efficiency and strategic initiatives.
Full-year Cash Flow from Operating Activities surged by approximately 162% to $183.9 million, positively impacted by a $43.8 million improvement in Accounts Receivable balances. Capital Expenditures for the year were approximately $156 million, a decrease from the $167 million spent in 2022, reflecting the company's disciplined capital management.
Aris Water Solutions Inc's leverage ratio at the end of 2023 was 2.4X, below the target range of 2.5X-3.5X, indicating a strong balance sheet. The company had approximately $5 million in cash and $324 million available under its revolving credit facility, totaling $329 million in available liquidity.
Looking ahead to 2024, CEO Amanda Brock expressed optimism, citing the company's focus on unlocking additional value from its infrastructure, driving increased returns from existing assets, and demonstrating sustainable cash generation capability. Aris Water Solutions Inc expects to continue its growth alongside new and existing customers, with a positive outlook on operating margins and free cash flow generation.
Operational Efficiency and Environmental Impact
In 2023, Aris Water Solutions Inc's water recycling infrastructure facilitated over 118 million barrels of recycled produced water, growing 8% year over year. The company achieved a milestone in December by recycling over 550,000 barrels in a single day. Over the past three years, Aris has helped its customers reduce groundwater withdrawals by more than 270 million barrels, significantly enhancing water sustainability in the areas it operates.
The company's operational update shows a 21% increase in total volumes handled, with a 16% increase in Produced Water Handling Volumes and a 32% increase in Total Water Solutions Volumes compared to the same quarter in the previous year. These figures underscore Aris's ability to grow substantially while structurally reducing operating costs.
Aris Water Solutions Inc's strong financial performance, commitment to operational excellence, and positive environmental impact position it well for continued success in the Utilities - Regulated industry. The company's focus on cash generation and efficiency improvements is expected to deliver sustainable value to shareholders and stakeholders alike in the coming year.
For more detailed information, investors and interested parties are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Aris Water Solutions Inc for further details.
This article first appeared on GuruFocus.
