Select Water Solutions Reports Financial Successes and Strategic Initiatives for 2024

Select Water Solutions, Inc. (NYSE: WTTR) has recently published its financial and operational outcomes for the fourth quarter and full year of 2024, showcasing remarkable achievements both monetarily and strategically. For the full year 2024, the company generated consolidated revenues of $1.5 billion, despite a slight decline compared to the $1.6 billion recorded in the previous year. In the fourth quarter alone, revenues reached $349 million, indicative of solid performance amid challenges faced in seasonal demand.

Highlights of Financial Performance

The Water Infrastructure segment reported revenues of $291 million for the year, reflecting a substantial 26% year-over-year growth, along with an impressive 62% increase in gross profit. This growth is attributed to the company’s established leadership in providing sustainable water solutions tailored for the energy sector.

During 2024, Select Water Solutions demonstrated robust operational capacity, with operating cash flows amounting to $235 million for the year and $68 million for the fourth quarter. The company successfully implemented multiple long-term contracts for Water Infrastructure projects in the Permian Basin, supported by a new 150,000+ acre dedication, thereby anticipating additional capital deployment in the range of $39 to $41 million.

John Schmitz, CEO of Select Water Solutions stated, "The fourth quarter concluded another record-setting year... with strong earnings and steady free cash flow generation, enabling us to further enhance our business operations through strategic investments and acquisitions." The company also maintained a solid adjusted EBITDA of $258 million for the whole year.

New Strategic Initiatives

Looking ahead, Select Water Solutions plans to navigate the anticipated modest decline in U.S. drilling activities by focusing on organic growth opportunities within its Water Infrastructure segment. Focus areas include capitalizing on competitive water and chemical solutions while engaging in new municipal, industrial, and agricultural projects. Recently, the company announced a $62 million investment aimed at forming a new partnership for a water rights and storage initiative in Colorado.

This venture is poised to establish crucial supply agreements aimed at generating long-term, sustainable margins while addressing water scarcity challenges throughout local communities. The company's entry into the agricultural and municipal markets further diversifies its operational footprint and opens avenues for enhanced profitability and community support.

Challenges and Opportunities

Despite the achievements, Select Water Solutions encountered setbacks in the fourth quarter with a reported net loss of $2.1 million, influenced by prior year's substantial tax adjustments, underscoring the inherent volatility in the industry. However, the company remains undeterred, projecting increased revenues tied to infrastructure growth and improved margins moving forward into 2025. The firm expects its Water Infrastructure revenue to continue reflecting significant year-over-year growth, solidifying its position as a leader in sourcing, treating, and distributing water across various markets.

Overall, Select Water Solutions' commitment to future growth, operational expansion, and community engagement, along with a strategic focus on high-margin contracts, demonstrates the company's clear intent to tackle emerging challenges head-on while paving the way for sustained financial success. As remarked by Schmitz, "We believe our integrated approach provides distinct competitive advantages and solidifies our place in both traditional energy and new market segments."

Conclusion

As Select Water Solutions progresses into 2025, the firm's growth trajectory appears optimistic, underpinned by a robust portfolio of contracts and a strategic approach to addressing evolving market demands. Stakeholders can anticipate a continued focus on capital expenditures that support sustainable projects, ultimately enhancing the company's operational capacity while fostering economic development in the regions they serve.