USA Compression Partners LP Reports Record Revenues in Q4 2023
Revenue: Achieved record total revenues of $225.0 million in Q4 2023, a significant increase from $190.1 million in Q4 2022.
Net Income: Net income rose to $12.8 million in Q4 2023, up from $8.4 million in the same quarter the previous year.
Adjusted EBITDA: Reported a robust Adjusted EBITDA of $138.6 million for Q4 2023, compared to $113.0 million in Q4 2022.
Distributable Cash Flow: Distributable Cash Flow increased to $79.9 million, with a coverage ratio of 1.48x.
Utilization and Expansion: Average horsepower utilization was up to 94.1%, with record average revenue-generating horsepower of 3.41 million.
On February 13, 2024, USA Compression Partners LP (NYSE:USAC) released its 8-K filing, detailing a quarter of significant financial achievements. USAC, a leading provider of compression services for natural gas and crude oil production in the United States, has reported record revenues and horsepower utilization for the fourth quarter of 2023.
Company Overview
USAC specializes in compression services essential for the processing and transportation of natural gas through the domestic pipeline system and for enhancing crude oil production through artificial lift processes. With a focus on several shale plays across the U.S., including the Utica, Marcellus, Permian Basin, and Eagle Ford, USAC engineers, designs, operates, services, and repairs its compression units while maintaining related support inventory and equipment.
Financial and Operational Performance
The company's financial performance in Q4 2023 was marked by record revenues of $225.0 million, a substantial increase from the $190.1 million reported in the same quarter of the previous year. This growth is attributed to the company's operational efficiency and high market demand for its compression services. Net income also saw an increase to $12.8 million, up from $8.4 million in Q4 2022, despite a $10.5 million loss on derivative instruments.
USAC's Adjusted EBITDA for the quarter stood at $138.6 million, up from $113.0 million in Q4 2022, reflecting the company's ability to optimize its operations and manage costs effectively. The Distributable Cash Flow also increased to $79.9 million, with a coverage ratio of 1.48x, indicating a strong capacity to cover its distributions and invest in growth.
Operational highlights include a record average revenue-generating horsepower of 3.41 million and an average horsepower utilization of 94.1%, demonstrating the company's operational excellence and the high demand for its services. The record average revenue per revenue-generating horsepower per month of $19.52 for Q4 2023, compared to $17.81 for Q4 2022, further underscores the company's pricing power and market leadership.
Financial Condition and Outlook
Eric D. Long, President and CEO of USAC, commented on the results, stating, "Our fourth-quarter achievements consisted of consecutive-quarter record-setting revenues, Adjusted EBITDA, Distributable Cash Flow, and Distributable Cash Flow Coverage." He also expressed optimism for 2024, citing expectations of continued tightness in the large-horsepower compression market and growth in crude oil and natural gas production in key basins.
The company's balance sheet reflects a total asset value of $2.736 billion and a long-term debt net of $2.336 billion, with a total partners deficit of $(293.285) million. Looking ahead, USAC has provided a full-year 2024 guidance with a net income range of $95.0 million to $115.0 million and an Adjusted EBITDA range of $555.0 million to $575.0 million.
For value investors and potential GuruFocus.com members, USAC's strong Q4 2023 performance, coupled with its positive outlook for 2024, presents a compelling case for the company's financial health and growth prospects. The company's ability to generate record revenues and maintain high utilization rates in a competitive industry speaks to its operational efficiency and strategic positioning.
For more detailed information and analysis, investors are encouraged to review the full 8-K filing and consider the implications of USAC's financial results on their investment decisions.
Explore the complete 8-K earnings release (here) from USA Compression Partners LP for further details.
This article first appeared on GuruFocus.
