Antero Midstream Gathering Volumes Rise 19% in Second Quarter
Adjusted net income fell 7% to $0.27 a share as interest costs rose following an acquisition.
Antero Midstream (AM) reported second-quarter results characterized by accelerating gathering volumes and a decline in per-share profitability. The energy infrastructure company saw a divergence between its operational throughput and its bottom line, as financing costs for recent expansion weighed on net income.
Gathering volumes increased 19% year-over-year in the second quarter, an acceleration from the 14% increase recorded in the first quarter. Compression volumes also rose 17% year-over-year.
Adjusted EBITDA reached $289 million, a 2% increase year-over-year. This growth slowed from the 5% increase seen in the first quarter, where adjusted EBITDA was $288 million.
Adjusted net income decreased 7% year-over-year to $0.27 a share. This result reversed a 4% increase in the first quarter, when adjusted net income was $0.29 a share. Net income fell 8% year-over-year to $0.24 a share, compared to the first quarter where results were in line with the prior year.
The decline in profitability followed a 16% year-over-year drop in fresh water delivery volumes, which averaged 82 MBbl/d. This followed a 21% decrease in the first quarter. Additionally, interest expense rose 16% year-over-year to $56 million due to financing for the HG Energy acquisition.
Adjusted free cash flow after dividends was $80 million, down from $85 million in the first quarter. Capital expenditures rose to $47 million from $42 million in the prior quarter. During the period, the company began construction on the East Side Express, its first intrastate regional pipeline.
In July, the company received $371 million in damages and interest from Veolia following a Colorado Supreme Court affirmation. Antero Midstream used those proceeds and borrowings from its revolving credit facility to call $650 million of senior notes due 2028 at par.
Share repurchases slowed during the quarter. The company bought back 0.4 million shares for $8 million, compared to 1.0 million shares for $18 million in the first quarter.