HOUSTON - Aris Water Solutions, Inc. (NYSE: ARIS), a prominent environmental infrastructure and solutions provider, has reported a robust financial and operational performance for the first quarter of 2024. The company saw a significant increase in produced water volumes, a substantial rise in net income, and an uptick in Adjusted EBITDA compared to the same period last year.
The company achieved a 6% sequential increase in produced water volumes and a notable 19% rise compared to the first quarter of 2023. Recycled produced water volumes grew by 31% compared to the first quarter of the previous year. Aris Water also reported a first quarter 2024 net income of $16.8 million, marking a 29% increase from the fourth quarter of 2023.
Adjusted EBITDA for the first quarter stood at $53.1 million, up 8% sequentially and 39% from the first quarter of 2023. The company's Gross Margin per Barrel improved by 19%, and Adjusted Operating Margin per Barrel increased by 12% sequentially, setting new records and reflecting the success of electrification and cost reduction initiatives.
With a strong balance sheet, the company's quarter-end leverage was at 2.15x, and it reported $324 million of available liquidity under its revolving credit facility. In a show of confidence in its long-term outlook, Aris announced a 17% increase to its quarterly dividend, moving from $0.09 per share to $0.105 per share.
Amanda Brock, President and CEO of Aris, highlighted the exceptional start to the year, the company's increased operating margins, and its focus on leveraging its asset footprint to lower capital spending. She also noted the company's commitment to evaluating growth opportunities, particularly in beneficial reuse and mineral extraction from produced water.
Aris Water's long-term infrastructure contracts in the Permian Basin provide significant volume and revenue visibility, with over 80% of revenue stemming from these production-based dedication agreements.
Looking ahead, the company has raised the low-end of its 2024 Adjusted EBITDA guidance, now expecting it to be between $185 and $200 million. For the second quarter of 2024, Aris anticipates produced water handling volumes between 1,015 and 1,045 thousand barrels of water per day, and Adjusted EBITDA between $44 and $48 million, among other projections.
This financial update is based on a press release statement from Aris Water Solutions, Inc.
InvestingPro Insights
Aris Water Solutions, Inc. (NYSE: ARIS) has demonstrated a strong start to 2024, and InvestingPro data and tips echo this sentiment. With a market capitalization of $871.93 million, the company's financial health is solid. The P/E ratio stands at 22.86, indicating that investors are willing to pay a premium for the company's earnings, which aligns with the optimism surrounding its growth prospects.
Furthermore, the impressive gross profit margin of 54.93% for the last twelve months as of Q1 2023 showcases the company's efficiency in managing its cost of sales, a key factor in its increasing operating margins mentioned by CEO Amanda Brock.
The company's stock has experienced a strong return over the last year, with a 127.65% price total return, and is currently trading near its 52-week high at 99.14% of the peak price. This is a testament to the company's robust performance and the market's positive reaction to its strategic initiatives. Moreover, two analysts have revised their earnings upwards for the upcoming period, reinforcing the positive outlook for the company's profitability.
For those interested in a deeper dive into Aris Water Solutions' financials and projections, InvestingPro offers additional insights and tips to guide investment decisions. There are currently 9 more InvestingPro Tips available for ARIS, which can be accessed at https://www.investing.com/pro/ARIS. To enhance your experience, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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