USA Compression sees Q1 net income reach $3.3 million

USAC provides compression services across a geographically–diversified operating area. (Photo: USA Compression Partners)

Austin, Texas-based USA Compression Partners reported revenue and net income rose in Q1 from a year earlier, but net cash from operating activities and distributable cash flows slipped from last year.

Revenues were $163.4 million for the period, up from $157.5 million from one year earlier. Net income was $3.3 million, up from $400,000 a year earlier. Net cash from operating activities was $35.1 million, down from $39.6 million a year earlier. Distributable cash flow was $50.1 million, down from $52.6 million a year earlier, the company announced. 

“During the first quarter, we started to realize the anticipated pick-up in demand for our contract compression services,” said Eric D. Long, USA Compression’s president and CEO. “The strong levels of quote activity we saw prior to the Russian invasion of Ukraine on February 24th have continued to increase – leading to top-line growth, with increases in total revenue, active horsepower, horsepower utilization and pricing.”

The company’s average active horsepower increased by approximately 28,000 horsepower throughout the first quarter. By the end of the period, horsepower utilization had increased to 86.1%, up from 82.7% at the end of 2021. Average pricing per month increased to $16.87, up from $16.62 during the fourth quarter of 2021, he said.

Despite supply chain bottlenecks that cropped up throughout the energy industry, USA Compression was able to quickly redeploy high quality recent vintage equipment from its idle fleet to meet the growing requirements from its long-time infrastructure customers. The company expects fleet utilization to continue to increase through the rest of the year, he said.

Expansion capital for the quarter was about $20 million, divided roughly evenly between reconfiguration of existing unit purchases and start ups, the company said.

Strong demand from its largest customers led the company to commit to purchase an additional 20 large horsepower compression units. Total new unit orders for 2022 now reach 30 units for a total of 75,000 hp. The company hopes to deploy the new units by late 2022 or early 2023 with secure multi-year contracts in place, the company said.

The company has invested in dual drive compression systems, which give its customers the ability to deploy electric compression that significantly reduces emissions while maintaining reliability from the redundancy of natural gas compression, he said.

“The time and effort we’ve invested in the dual drive offering has begun to bear fruit, with the recent execution of our first multi-year contract for a series of large horsepower units with an existing customer,” Long said.

The dual drive compression enables USA Compression customers to improve their environmental footprint from this hybrid technology. USA Compression’s expansion capital expenditures were $20.1 million while maintenance and capital expenditures were $5.8 million in Q1.

The company confirmed its full year 2022 guidance that net income would range from $33 million to $53 million. Adjusted EBITDA is expected to range between $406 million and $426 million while distributable cash flow will range from $213 million to $233 million.