On Friday, Shares of EnLink Midstream (NYSE: ENLC) declined -1.39% to $12.10. The stock grabbed the investor’s attention and traded 1,902,662 shares as compared to its average daily volume of 3.00M shares. The stock’s institutional ownership stands at 61.20%.
The EnLink Midstream companies (EnLink), EnLink Midstream Partners, LP (the Partnership or ENLK) and EnLink Midstream, LLC (ENLC) (ENLC), recently stated results for the fourth quarter and full-year 2018, reaffirmed 2019 financial guidance, and offered an operational update.
EnLink Midstream Partners, LP: Fourth Quarter and Full-Year 2018 Financial Results:
- The Partnership stated a net loss attributable to ENLK of $230.20M for the fourth quarter of 2018 and a net loss of $28.0M for full-year 2018. ENLK’s net loss for the fourth quarter and full-year 2018 includes non-cash expenses of $341.20M and $365.80M, respectively, related to impairments. ENLK recognized non-cash impairments on goodwill in the Texas reporting unit. The goodwill was created mainly as a result of the Devon business combination in 2014. In Addition To, ENLK recognized impairments of $109.20M and $133.80M for the fourth quarter of 2018 and full-year 2018, respectively, because the carrying values of certain non-core assets were determined to exceed their fair values. Comparatively, the Partnership stated net income attributable to ENLK of $75.70M and $148.90M for the fourth quarter of 2017 and full-year 2017, respectively. ENLK’s net income for 2017 included a non-cash benefit of $24.90M related to the enacted tax reform law known as the Tax Cuts and Jobs Act.
- The Partnership achieved $273.90M of adjusted EBITDA net to ENLK for the fourth quarter of 2018 and achieved $1.0420B for full-year 2018. Comparatively, the Partnership achieved $238.70M of adjusted EBITDA net to ENLK for the fourth quarter of 2017 and $872.80M for full-year 2017. Adjusted EBITDA net to ENLK increased by about 15 percent for the fourth quarter of 2018 when contrast to the fourth quarter of 2017 and increased about 19 percent for full-year 2018 when contrast to full-year 2017.
- The Partnership achieved net cash offered by operating activities of $313.0M for the fourth quarter of 2018 and $856.80M for full-year 2018. Comparatively, the Partnership achieved net cash offered by operating activities of $173.50M for the fourth quarter of 2017 and $706.50M for full-year 2017. Fourth quarter growth in net cash offered by operating activities, year-over-year, was about 80 percent, and full-year growth, year-over-year, was about 21 percent.
- DCF totaled $191.30M for the fourth quarter of 2018 and $727.90M for full-year 2018. Comparatively, DCF totaled $163.70M for the fourth quarter of 2017 and $621.10M for full-year 2017. Fourth quarter and full-year growth in DCF, year over year, were about 17 percent. ENLK achieved distribution coverage of 1.24x for the fourth quarter of 2018 and 1.18x for the full-year 2018. Debt to adjusted EBITDA as of December 31, 2018, was 3.78x, contrast to 3.58x as of December 31, 2017, as calculated under the terms of ENLK’s credit facility, and was below the 2018 guidance range of 3.85x to 4.00x.
- Growth capital expenditures net to ENLK for full-year 2018 were about $650.0M, which was slightly below the low end of the 2018 guidance range of $685.0M to $755.0M.
- Maintenance capital expenditures for full-year 2018 were about $43.0M, slightly below the low end of the 2018 guidance range of $45.0M to $50.0M. The primary reason for maintenance capital expenditures being below guidance relates to a shift in timing of certain projects, which are expected to be accomplished during 2019.
EnLink Midstream, LLC: Fourth Quarter and Full-Year 2018 Financial Results:
- ENLC stated a net loss attributable to ENLC of $61.30M for the fourth quarter of 2018 and $13.20M for full-year 2018. The net loss for 2018 includes impacts related to non-cash impairments stated at ENLK. Comparatively, ENLC stated net income attributable to ENLC of $202.60M for the fourth quarter of 2017 and net income of $212.80M for full-year 2017. Net income for the fourth quarter and full-year 2017 includes a $210.60M non-cash tax benefit related to the Tax Cuts and Jobs Act.
- ENLC’s cash available for distribution was $58.40M for the fourth quarter of 2018 and $2310M for full-year 2018. Comparatively, ENLC’s cash available for distribution was $58.10M for the fourth quarter of 2017 and $216.50M for full-year 2017. ENLC achieved distribution coverage of 1.16x for the fourth quarter of 2018 and 1.17x for full-year 2018. Growth capital expenditures net to ENLC for full-year 2018 were about $67.0M, in line with the 2018 guidance range of $40.0M to $70.0M.
- As of February 13, 2019, there were 486.634M ENLC common units outstanding, reflecting the completion of the simplification transaction with ENLK on January 25, 2019.
EnLink Midstream, LLC: 2019 Financial Guidance and Future Outlook:
- Net income is projected to range from $205.0M to $215.0M for full-year 2019.
- Adjusted EBITDA is projected to range from $1.085B to $1.175B for full-year 2019, representing a boost of about 5 percent comparing the projected midpoint of $1.130B to EnLink’s consolidated 2018 adjusted EBITDA.
- DCF is projected to range from about $730.0M to $800.0M for full-year 2019.
- Growth capital expenditures funded exclusively by EnLink are projected to range from $605.0M to $775.0M for full-year 2019 and are forecasted to be driven by ongoing investments in the company’s key growth regions of Oklahoma, the Permian Basin, and Louisiana’s Gulf Coast. EnLink anticipates realizing adjusted EBITDA return multiples on organic capital investments in the mid-single-digit range.
ENLC has a market value of $5.97B while its EPS was booked as $-0.07 in the last 12 months. The stock has 493.47M shares outstanding. In the profitability analysis, the company has gross profit margin of 22.00% while net profit margin was -0.20%. Beta value of the company was 2.25; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.60.
