Altus stock tripled overnight as the company plans to recommend a quarterly dividend of $1.50 per share beginning in March 2021.
Shares of the Permian-to-Gulf Coast midstream oil & gas pipeline company, Altus Midstream Company (ALTM) skyrocketed on positive third quarter results and upgraded future outlook, including a dividend policy to recommend Board of Directors (BoDs) to initiate quarterly dividend payout in March 2021.
Altus shares price tripled during yesterday’s trading session to $30.54 compared to the previous close of $10.03. The stock soared higher in the premarket on Thursday above 80% as it kicked off the session at $18.27.
Strong Q3 Results and Updated Outlook
The trading volume rallied to 12 million on Thursday and mostly it was driven by the raised future outlook and potential dividend policy.
Altus Midstream revenue for the third quarter was reported at $40.2 million compared to $34 million in Q3 2019. The net income also saw a notable growth to $29.3 million from a net loss of $8.2 million in the same period last year. The adjusted EBITDA was around $53 million in Q3 2020, showing a 21% increase from the prior quarter.
The capital investments were recorded at around $134 million, including a $119 million investment for the Permian Highway Pipeline (PHP).Altus expects an annual capital investment for fiscal year 2020 to range between $330 to 360 million.
Altus’ PHP project is fully subscribed under long-term, binding agreements and is almost 97% mechanically complete. The company expects PHP to begin operation in the first quarter of 2021.
In the Permian Basin, drilling has started once again and the company anticipates the volumes to increase in 2021 for both the EPIC crude oil pipeline and the Shin Oak NGL pipeline.
Furthermore, the company also updated that it intends to propose the BoDs to payout a quarterly dividend of $1.50 per share beginning in March 2021.
Altus Midstream CEO, Clay Bretches said:
“Following an extensive review of strategic alternatives and with increased confidence in forecasted cash flows, we believe a dividend is the best option to generate shareholder value.”
With the improved financial performance and business growth, Altus Midstream Company (ALTM) has raised the midpoint of its 2020 and 2021 Adjusted EBITDA guidance levels. In addition, the company will leverage its portfolio with further developments and continue to haveample liquidity to address expected capital needs.
The improved future outlook has brought a wave of new investors. The current quarter will be a key decider for the company that will give a clear image of the initial quarters of next year.