ET - Energy Transfer: A Story Of Positive Free Cash Flow
- For FY 2020, Energy Transfer generated positive free cash flow after taking into account equity distributions and growth Capex, marking the much-anticipated inflection point.
- For FY 2021, Energy Transfer is anticipated to generate ~$3 billion in free cash flow, driven by higher EBITDA (as per new guidance) and lower growth Capex.
- What's more, one must add into the mix the effects of the leverage-accretive Enable acquisition, which further boosts free cash flow.
- Generating more than $3 billion in annual free cash flow (and growing each year due to further reductions in growth Capex) provides tremendous financial flexibility as well as a margin of safety in the event of a negative outcome with DAPL etc.
- Don't rule out the newly formed Alternative Energy Group that will focus on Dual Drive Compressors, Renewable Fuels, Solar and Carbon Capture, among others. Once the target leverage is met, Energy Transfer will most likely accelerate many of these initiatives, which might change investor perception.
For further details see:
Energy Transfer: A Story Of Positive Free Cash Flow