New Fortress Energy (NFE) 8 May 242024 Q1 Earnings call transcript

Good morning, everyone, and welcome to the New Fortress Energy First Quarter 2024 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] To get us started today with opening remarks and introductions, I am pleased to turn the floor over to Managing Director of Strategy and Investor Relations, Mr. Chance Pipitone. Please go ahead, sir.

good and Lisa, you, morning, everyone. Thank for discuss our you joining today's will we where call, first conference Thank quarter results. XXXX the is Presentations. call by website being and the Investors on under will our section Events The subheading of be recorded replay and available location, find a same walk we presentation will call. today's on you the that will At through Please risk factors. as includes information, important it this review including and disclosures

and over CEO, now With hand the call our that, Edens. Wes Chairman I'll to

Great. Thanks, Chance, welcome, and everybody.

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logistics provide Hurricane -- power of need to island, Puerto we TBtus us. step XXXX, and contract into for first devastation in is the the XXXX, island, Juan Rico fall for and roughly the into chain the XX work. and went Maria, gas in the power where in power We big of the today to a entered into put opened time. for just of for right first and Both to June cheaper are gas saw Let's X middle to the to San terminal went for days the after our saw the in This COVID, context. bring a

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an is terminals, long term, contracted X on are progress. first we're now update LNG The rapid are for our the commercial which making online, and

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morning, Andrew. everybody. Good Thanks,

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Slide $XX which XX. to per GAAP share a or shows diluted million the net quarter, was And basis. for this Move income on $X.XX

backing the with the noise does the [ on So you of some The net for However, include PREPA. ] in this as the associated first back incurred turbines results for when Wes loss charges, it the mentioned, sale add share $XXX million nonrecurring $X.XX million when or operations or to was from the per quarter losses. the quarter nonrecurring $XXX funds of out income per share. $X.XX

of ] of related the are bullet contract. power the and charges termination in nonrecurring bulk part of turbine right, mentioned to sale the PREPA to the [ the the as of emergency As on the the

a turbines leasing. obligations. we treatment The basis purchase here refresher, were include the purchased a is we the $XXX that sold accounting the the units a applies that price way for and we in and lease and of XXXXs As of of X that TM pay we the sold owned total have off to of XX cost own, million we XX units plus

loss a afternoon. XX-Q Additionally, later leads and we of All obligations carrying the million the to filed further detailed this we value. in this included in the quarter some maintenance $XX in recognized

Rico, proceeds and be out Puerto earnings. settle components Wes remaining in when we claim will Finally, the the Brannen those recognized as in of discussed,

the about of a for Slide rest our comment on the quickly And strategy #XX, financing year.

has assets to BB+ over and with Now next been with rating and of soon financing on and virtually We focusing be a sit the to corporate at work in level be which over weeks, couple our project the successfully we of has months. XX path FLNG will credit reduce BB terminal to the development the and to should met deployed complete proceeds debt. and squarely been improvements to agencies corporate operational, them past are the review range strong we XX believe rating, the update with and we using

turn the the upgraded the robust million billion, with capital I'll maturities; sound notes goal near-term and bond on refinanced which proceeds mentioned we our the one, to repay to out generation Then financial over the use execute secured estimated we call and by deals billion two, asset $XXX color. to, This B to Wes cash of X a and Term is $X.XX will credit have such, with get revolving FLNG $X.X in plan for the rated some ensures XXXX, policy. fully pushing Loan free flow facility. due As funded previously

it's focused on in incredible in as Great. of all just focused will initiatives productive the our an incredible I an be the near the our We're we're the time core been for on summer as we're than and centers Power There's is data world the development need core There's achieve that us most competencies adjacency to ours, no we of continue in focused highly that's perhaps the That's reliable we've that of number of mean, term. and for so power This update. lives one what need detailed. demonstrated life very growth do quarter on. also company. dispatchable very of centers. is extremely greater rapid power. core what markets. the There's a data worth that's mentioning the additional in no greater in we well have

This the focused just us direct on material on to The Ireland could core provide [indiscernible] a impact future. We a allow clearly opportunity. businesses. is to where received to This stay looking today, on me very adjacency develop that capabilities, markets something centers. think in is but Chance in tuned people of let There's this. help I we these This core needs evolve for it solve us the highlight. direct Brazil Puerto core our numerous to situations want and into our also we're that adjacency in data companies and in for will over company benefit our focused or this them for reverse report has inquiries Rico, a nothing the to We're solution help are greatly. turn on to Then questions.

let's lines for up the questions. if would, Operator, you you. Thank open

from question We'll first take Brothers. Tuohy Instructions] Shere Craig our [Operator with

elevated pricing? to And growth can sustained on Rico linked any Puerto incremental And to you your risk. finally, acceptable thoughts also be market Puerto spread spreads can pricing LNG beyond out LNG on to contract the fuel XX% Rican liquid spreads TBtu liquid us during LNG XX PREPA diesel? perhaps spot So landed update current hedging to of afford

Rico from savings. into they about contracts, while contract that a the let with this about talk to where contract conversation I'll period switch But to longer-term specifically. this interim they Puerto looking had ensure them want make that fuels was they want to nature benefit Brannen the sure enter and of during basically that to

direct to diesel most simplest was it of And doing so and so. the directly way linking

XX% So is roughly is of XX% $XX, roughly today, diesel diesel $XX.

also $XX margins business. diesel and So a what on significant significant savings represents for us today represents relative versus it they're spending to our

very we good as generation, right contract Our expect, view And pattern quantity for would the of that's way we what them very, twice it's gas transition would of actually the what to expand new developments was period, the fee but to [ is from at times, price, over did a would to lower much we and think of more. We that. also term And -- next that's to is fuel power. provide expand as for as needs is be that direct the Henry [indiscernible] the I and Hub-based expect. and provide the That correct there's look longer-term us with that X-year short-term same now that something basic a contract go this and but to so actually the to around then volumes a through this is how greater, expect ] transition island I their so algorithm run expect long-term and will price short more contracts this in even they we FEMA.

total TBtus right what it's which we have. As in Brannen now, demand roughly Xx is XXX of said,

will all that we it's and that any are Brannen, much you have represents more So without is XXX% meaningful today, so current less, it convert that? thoughts or when to. going exactly to capacity is the a say increase can what get you do and converted how knowing of of about

Yes.

captured of points. that it X and think then I I'll Just one I ones think just hit your perfect. quick Maybe

on the about highly you now -- First growth positive, all, you the not other you historically a actually place grows, that you than need if can in not happen population seeing, XX are them our to certainly flat will And and and kind really to I basically imagine even which a TBtu the that up, you of what because as official different more think has about growth years, projections flat cetera, think generation of most today of much in when is revised for what particularly been in need going maybe from GDP different But terms more the of kind a now but et people macro estimates power. XXX even in tremendous being particular, about plans negative first time think here, power. that tremendous relevant probably more of for based Puerto gas-fired exists opportunity transformation, Rico kind slightly of in are -- point, forward.

really taking get current they're few action on So you're current exercised which about actually contract fleet the specifically, and Wes a long-term my X-year what supports really what But in [ the for view. will Wes being and it, as What a as that is XX they now transitioned. is power. which TBtus, also mentioned, think I contract, are idea extension it's building asking ] with X periods, indicated, year certainly

is might it. think in fixed buying I basis. think deeply a start about you're idea on interested because index that. XX-year on migrating of And even In you we to more raised started could time this the certainly index particular diesel conversations fixed them gas years PPAs, here They you on with resembles to it you solar hedging, potentially imagine and to concept. fixed that something are a So Hub price buying of about Henry have migrating if the over price XX

we the whole the [ the what ] likely certainly plus Henry So something that be will Hub price the to renewables, particular, XX to conceptually that's they're supercharges index. get trying them, beyond think I be will energy growth gas the there to Wes island. really it long-term as But likely be TBtu, said, for is growth really in as discussed. certainty that on because also complex But moves do proposition expect

U-shaped finally, proceeds an early settlement from it [indiscernible] end. contract could how treat excluding contract, Nicaragua. EBITDA on standpoint, contribution thoughts fit ] is EBITDA envision And performance in period FEMA as the TBtu more then the time fair over [ If a lost to to From filled XXX-megawatt that, an in and contract just Barcarena ADT plant the is and to I quickly. ] one adjusted FEMA [ extended of the growing Brazilian with

significant The really bulk could settlement would we some it right, bulk a up time. it, simply. simply Brazil, the or a capital There and be a with respect have can of not the to a whatnot, return job fuels be terms the today. process, developments in the outlining. actually for of are in stuff the And would paid settlement capacity to relatively ready of burn multi-month in on regas money could island of a capital be of to turning harder Brannen of in that that is can process, That happen all short happen the gas but that certain be Nicaragua, a today hooked means rapidly did of There some with things very, earnings. that the power of for distillate some switching With simply the little very period shape be great can is respect is there short of kind fuels to and earnings, just on to gas company, happens multiyear is amounts the like from the in the et rest issues of gas. the it's improvements function as cetera. that transformation how term, of modest because maybe a But particular, in this is the U that of U-shape massive some predict other expected

period the is this company during So recognize that of I actually transition difficult. modeling

to And much get so try guidance we'll can. as as we

will quarter You're get simpler. modeling probably away being to the data, make country-by-country exercise much, a much provide -- able which from to

is The in we one the than proposition the sum vastly great like is not have model the greater of what I any can the can today. on say structure looks valuation capital thing with the prospectively, books parts result, today, of certainty it

theoretical I and once so much that, a, That's all flows are do growth this have think The are why the went in theoretical to These you that look in will elsewhere. Puerto we completed. are not much, all at are But Rico through be model positive assets. Andrew These These is actually numbers. on transition is events So numbers. not to the it simpler cash Brazil. place about numbers existing in forecasts.

on So we a showing of couple really actually the these over forecast we're years, direct next them basis.

you it at doesn't our all. So to me like look those it there's when add current to business, into U

So I over But a a differences certainly, duration. terms both there or or quarter point, numbers terms can to upside nothing X- but happen. X we timing in in from think over of is of this X-year size, also think a but period, our

So.

Theresa And with to next our move Chen question ladies Barclays. will comes and gentlemen, we from

Puerto the I wanted to follow side. up on Rico

] you timeline [indiscernible] as volumes and far is XX main TBtu, the Please. what give pathway are can what As [ indication to and to ramp near term us of the the an

is Brannen. This sure. Yes,

mean, X, [ that that with my a ] think for the depending it has opportunity, I of the and today. how about to a look you going is start And that the existing to want on at Wes pick, get San we of quarters think to on XX end it then that's in converted permanent XX the is I Juan as you the the I temp kind then just that. there is of then from in depending slide in if how model going at I off but that today, power standpoint, on X.X starts you even and TBtu example, month basics power about year. been on you're and XXX for exists And the you kind you way said, at and to megawatts supplemental well, of the certainly you power, into XX, look XX, ramp over at Paliceco XX likely view, to that and think want actually all have -- and in which depending want are now the kind really by X actually you to assets look Mayaguez, modeling then what add if think lays which out in, the of to plus rate next kind

at to all finalizing done a be that We've progress. that same around our I in as to past. done racing movement I we've asset are utilization But at that perspective. working the drivers in time. the course the Wes And obviously we're on need opportunity -- then, think side, little never do be XX, sites. settle bumps things from in of Not little our of these Rico, you increase future, in logistics we'll of they're events going think but I to quickly are that are these if we're won't might the incremental very a in mean confident things infrastructure, that. successful at permissions beyond you some you would obviously and history it. bit not permits indicated, on development very course, timing bit look a to we're and And of that there's of able ordinary say in just then getting been the Puerto I highly say even the those road there of

So can view see do is a I view what oil-fired the clear want the think as then I XX going there It's we HFO start stuff is be to don't is view, that our kind ceiling. my there. trend retired. very mega a don't and to certainly, as and we I from all it view of

in the driving that certainly On of retirements. Henera those That's schedule. [ platform, charge we're ]

I a the to how are it that's thing of, my is motivated But and have certainly year. But trend the in kind up solar right and to is because only wants next but to really of kind right. we think the towards to we're year get the plus view, they highly happen, of going see to end so into the that of and island it gas-fired dust sort the where scenario battery. not And do

move to of line Sherif coming from next is with BTIG. And that Elmaghrabi question the we'll our

with this late, when if apologize on you online? that. Yes, I'm asked. us been we'll I come on in start Brazil, has would auction up so power But remind the power can this

Sherif, it's Andrew.

for X the So different products. is announcement

you plants generally auctions Because kind The build of go And apply if a because which agency only cycle first start think to to would for that's product X-year there's is probably product be August a we power, is run, effectively, for it's earlier, obviously, finish this earlier. for XXXX. existing years, XX can come power you plants, to a the But and which power from then immediately. that's larger when the online a by contract. and X-year on for simple generation existing is And new you have XXXX.

plants. for online mix think be 'XX a could [ our power portfolio. end those of new in the maybe ] have we it to by we expect X 'XX, And products So

knee to I little on events. course to that now a or reactions think drip normal the that would assume bit. from come add power the X years think because Just of be you as going X mean, auctions, I is Andrew said, when

asset now and think a gas provider them, they into a they those significant gas, the as beneficial existing into for of life these the in that does an eligible is they're are had mutually would if because that have gas, potentially obviously, that we Given to there be partnerships auctions actually bid us can [indiscernible] for tower south changing marketplace. are not amount that

a is or year. where may unique the year gas power a situation end well this a auction this next or auction So early power at in turning on result of

valuation so these we're XXXX, short from showing is kind for And of the standpoint. these that exciting by in about That's term. be financial so actions long-term results incredibly what may a this increased XXXX,

Puerto but of plants merchant in so similar with for touched the highlighted question. you that desire these second the X.X you like gigawatts go Second,, XX, on possible to seems for Slide contracts, Wes, and But price currency, X.X you guys power my Rico agreements actually on power there's highlighted gigawatts directly? is plants opportunity without Brazil. a it enter it

got possible. hydro lot a in parts cost. grid power Brazil, of is So low a of many though, Yes. Brazil And lot at is right? of the No, renewable in a certainly very year you've certainly different it and

So also JKM there stress is think the market the you when fixed contract well, more So it's on of for opportunity, you to in of the you're a of when capacity going in opportunity plants because a here then have generating is is organized the and not auctions a big the a regulated power needs only the sort we fixed real to merchant basically certainly also money. these And times contracts, opportunity opportunity that they then there, where is the but merchant in cost be allow an but basis. capacity system getting right? generate fee, and are as you these but at

move with Johnson And that Martin next Malloy question our we'll to from comes Rice.

should question First could outside Hydro for talk the some talk maybe about about additional Norsk you volumes Could the outlook know thinking on additional auctions, mentioned facility. is should Brazil. you about there? power be And we -- of for other adding opportunities you volumes? I the potential the maybe how

Yes.

large working the on a gas the announcing trans which contract. side, with about Catarina, Santa supply region. in are we're pipeline. just pipeline few today benefits today has of industrial this XX a And system. about kind of TBtu got Bolivia also so pricing. is XXX a number So We're of other contract the of It's consumers our first molecule at on We've outside our consumption with terminal the that TBtu

transport So first have. the is basically benefit we

north So will if to pipeline the or gas that from then either us comes customers Bolivian of sources, be they're pay, fee have that basically buying Brazil. buying gas which would other from the a from offshore are lower

us, is there's really which contract is solution can flexible, a they kind can fees. what transport companies get as And consumption of And patterns more benefits buying rather paying less then, distribution a of save much course, today. lower than a flexible buying the by transition that from other kind regulatory they these is around to then we actual Brazil. in of designed some more contracts from can the The from and they few They second with usually have we us. cost consumers some help money on consumer can regulated of is But by free on price. inflexible from the call also, their well in going compete

who So credits kind that. typically that's applicable well in and we're as to of a working industrial Brazil, on number good of are the larger consumers

Catarina We Barcarena. like a look portfolio in expect our to lot Santa

if do So we to and then baseload us on the money which supply, contracts also on power contract will go kind we'll ability MTPA have capacity of and X the right, make the give we'll more this of intermittent side.

of total power of on LNG X international the dispatch contingent we end supply, which of probably baseload. MTPA MTPA might X contracted up is spot X to kind of And prices. sort with and So linked is

Great. wanted helpful. second about to And my I Very just question, ask CapEx.

million here? was the quarter. I think that maybe it around during you first Could $XXX [indiscernible] about how talk

build -- you I can there's have what so the sorry, and of Yes. we are we the of the see in you lot guys. required the Nicaragua further lot very executing Rico. equity a will of it actions, my mean mic is because if financing fundamentally, I and CapEx here notes can been the outs But when conversions year, not follow-ups, then we at and rest a as there's There's Puerto -- in out little look balance to go And Q. of detailed the it. be there's in open in through

and Marty, CapEx Specifically, Puerto is of FLNG associated total the $XXX about Brazil, a The million it's the fully financed in terminals debt vessels base. are in $XXX the rest across expansion. on with which Rico million both X and about of

comes question with next Chris Robertson Bank. from our Deutsche And

last previous guidance Chris, follow I the just the to CapEx on just up to question presentation. wanted with that regards from

was around $X.X think I it billion.

and the to FLNG the quarter just for the of relates first to the it related is year as should much CapEx how total spending? X see then of overall So part gross CapEx. we trying think spend to how remaining And cadence about

Yes.

and what with billion FLNG by $X.X I still of works stand X. like billion assets So we're kind the expecting the in that for Brazil financed, $X.XX being

spent we that year, off. XXXX, quarter the of around really $XXX in for first will X, million. And balance then FLNG the taper For

and that and of You'll on course, May, April still spend have then very some through asset little spend.

of few as complete August we post first a make-ready LNG. expect July, kind activities We June,

It's asset the for as be will much outlined I Puerto in And in just of Rico. bit Jamaica a in CapEx. and As the first the on you really CapEx it's mentioned, and terminals and Rico. then little money quarter spent that Mexican not maintenance Q. for really obviously year, Puerto And the rest of the said, the equity I the conversion modest

for the build you And the you then continues of ramping on for its of the spend of FLNG all start power once go of done Brazil be the FLNG the CapEx Now will but plant, first should terminals as end spend LNG obviously, X. Barcarena X business on first CapEx the up quarter. to

And to circle Right. just back.

plant understand against tandem is as So power that the spend. financing Barcarena far drawn the with the I as down just in

out nets that So basically.

is be there's X.X there against spent And equity is second CapEx cash But facility, there. project year? the as much power how on well? on need one So going PortoCem that to this financing the no gigawatt for

Yes. perfect. Yes,

power you're the right totally on So Barcarena plant.

we with is and as we'll of financed all that's just fully there keep down Development it BNDS, So the the draw And funding Bank. Brazilian building. in

I or think CapEx the you're thing basically. is saying. So incremental so On CapEx PortoCem, zero kind of from same NFE equity today side

CapEx X closed are with banks, as on and have Brazilian we So we we funding go. a loan

just transition net then. a we'll probably We of will now talking what But bond draw that from to construction basis perspective, well, the thing, a that from you're months. to longer-term debt from a about structure in for next the down over same structure course Brazil CapEx result few of kind over

So from NFE. really CapEx any expect we don't incremental

that turn now today's session. Chance any to back remarks. and closing Pipitone I'll And question-and-answer additional concludes it for

have. for any following talk you look from Great, updates found few we'll months. to up update. questions you hope forward in calling you it And our a We a that much. the very everyone. in Obviously, it's I Thanks and and informative. you exciting perspective, to clarifying Thank

you your and today's conference. concludes Thank Ladies for gentlemen, participation. this

You may now disconnect.