NYSE$KNTK

Kinetik Holdings Inc · Q2 2022 earnings

Q2 2022 earnings · · Investor relations

Briefing

Reported robust financial and operating results and increased 2022 guidance.

Kinetik Holdings Inc. reported strong Q2 2022 results, driven by increased volumes and higher commodity prices. The company revised upwards its 2022 guidance for Pro Forma Adjusted EBITDA to $820 million to $840 million. Kinetik also completed a $3.0 billion sustainability-linked refinancing and fully redeemed all Series A Preferred Units.

  • Revised upwards 2022 Guidance for Pro Forma Adjusted EBITDA to $820 million to $840 million, representing a 5% increase over the prior guidance midpoint.
  • Completed $3.0 billion comprehensive, sustainability-linked refinancing.
  • Fully redeemed all Series A Preferred Units in July 2022, completing Kinetik’s overall capital structure simplification.
  • Reached Permian Highway Pipeline (“PHP”) expansion investment decision with expected in-service by November 1, 2023.

Headline financials

Total Revenue

$336M

Previous: $35.6M+842.8%
EPS (adj)

$0.06

Previous: $0.72-91.7%
Adjusted EBITDA

$208M

No prior period
Leverage Ratio

3.7

No prior period
Capital Expenditures

-$71.4M

No prior period
Free Cash Flow

$60M

Previous: $73.8M-18.7%
Net Income

$131M

Previous: $73.8M+78.0%
Operating Income

$40.6M

Previous: $13.6M+198.5%
Gross Profit

-$153M

Previous: $35.6M-529.1%
Cash & Equivalents

$5.32M

Previous: $75.1M-92.9%
Total Assets

$6B

Previous: $1.85B+223.5%
Stock-Based Comp

$12.2M

No prior period

Revenue & EPS history

Kinetik · Revenue · Quarterly

$336M

Q2 2022+842.8%vs Q2 2021
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Forward guidance

Kinetik is revising upwards its 2022 Guidance to $820 million to $840 million for Pro Forma Adjusted EBITDA and total 2022 capital expenditure guidance is $280 million to $300 million.

Tailwinds

  • Additional capital required for incremental wells to be turned-in-line in 2022 and new long-term gathering & processing agreements.
  • Capital in 2022 for the 120 MMcf/d processing capacity expansion of the Diamond Cryo complex.
  • Related to early capital spend for its 1 Bcf/d Delaware Link residue pipeline from Central Reeves County to Waha.
  • Expects a mid-teens pre-tax unlevered rate of return for its investment in the PHP expansion project.
  • Expects to fully fund its go-forward capital budget with organically generated free cash flow

Headwinds

  • Additional capital required for incremental wells to be turned-in-line in 2022 and new long-term gathering & processing agreements.
  • Capital in 2022 for the 120 MMcf/d processing capacity expansion of the Diamond Cryo complex.
  • Related to early capital spend for its 1 Bcf/d Delaware Link residue pipeline from Central Reeves County to Waha.
  • Capital contributions associated with the PHP expansion project, which is included in the Pipeline Transportation segment.
  • Borrowings on its $1.25 billion revolving credit facility and proceeds from its Dividend Reinvestment Plan

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2022

Historical avgQ2 2022

+4.6%

Avg return

Earnings day

+6.3%

Avg return

5 days after

+11.0%

Avg return

30 days after

37%

13 / 35 earnings

Positive

+208.5%

Q3 2020

Best reaction

-15.3%

Q2 2019

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.5%+1.3%-6.7%
Q4 2025+8.0%+6.7%+11.7%
Q3 2025-8.0%-6.2%-1.2%
Q1 2025+5.0%+11.5%+9.2%
Q4 2024-4.1%-6.1%-12.3%
Q3 2024+12.9%+15.1%+16.4%
Q2 2024+2.2%+0.9%+9.0%
Q1 2024-0.6%+1.4%+1.7%
Q4 2023+6.5%+5.2%+20.2%
Q3 2023-3.1%-1.3%-2.8%
Q2 2023-2.4%+0.1%-6.5%
Q1 2023-7.0%+0.8%+11.1%
Q4 2022+1.6%+7.4%+5.5%
Q3 2022-5.7%-6.8%-14.7%
Q2 2022-2.4%-1.1%-9.5%
Q1 2022+5.1%+8.5%+23.6%
Q4 2021-6.0%-1.7%+4.6%
Q3 2021+1.4%+4.9%+5.9%
Q2 2021-1.2%+0.9%-1.2%
Q1 2021-2.8%+0.5%+2.2%
Q4 2020-0.6%-8.4%-4.5%
Q3 2020+208.5%+236.2%+402.1%
Q2 2020+18.0%+19.2%+5.0%
Q1 2020-0.8%-7.6%+43.9%
Q2 2019-15.3%-23.7%-44.9%
Q4 2019-14.8%-14.8%-66.3%
Q3 2019-4.3%+0.4%-16.1%
Q1 2019+1.2%-1.4%-10.9%
Q4 2018-9.3%-8.5%-3.6%
Q2 2018-9.3%-8.5%-3.6%
Q4 2017-9.3%-31.3%-26.5%
Q3 2018-0.6%
Q1 2018-0.9%
Q2 2017+0.4%
Q3 2017-0.1%
Q1 2017

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