FTAI Infrastructure (FIP) 3 May 232023 Q1 Earnings call transcript

Hello. Thank you for standing by. And welcome to FTAI Infrastructure Q1 2023 Earnings Conference Call. At this time, all participants on a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Instructions] [Operator

like conference now speaker, to hand Andreini. Alan to would over the your I

sir. begin, may You

Thank would earnings Towanda. FTAI you, I Infrastructure to you first the all quarter XXXX call. like to welcome

Ken Joining me and Christopher, company’s the the of FTAI Scott Nicholson, CFO. here Infrastructure; CEO are today

in have investor that done already public press being to so. please note presentation We call is release which is website, the not our posted you mode you encourage have an this webcast. open we to and and on listen-only download if Also,

In financial directly addition, of today, EBITDA. some supplement. can we those will be in GAAP reconciliations comparable measures including discussing non-GAAP found The most call during earnings be the the measures measures to the adjusted

I certain including their out results. to Before I differ would statements earnings. and turn like may statements forward-looking from statements, today materially the that will regarding be future are uncertain by These actual Ken, point nature call made to over

release in in our We encourage and contained the factors you filed press forward-looking risk and financial to to presentation disclaimers review statements, quarterly review our non-GAAP measures regarding the and SEC. with the report investor

Now to Ken. call turn over I to the like would

everyone. first we latest also This good be discussing each will of our at developments Thanks, and an update Alan, segments. quarter morning, and results the financial morning, providing on our business

quarter that were materials the recently supplemental For our call, first referring to website. be this to I’ll posted

May be our report authorizing paid pleased to to financials, a the to Before will share with I’m to dividend record holders we of XXth per May quarterly a our Board we as on the be get that XXth. standalone on company $X.XX dividend paying third

continue $XX.X in of financials. momentum quarter financially prior to million to at to our XXXX. the expenses, in Adjusted quarter the We first portfolio. million from fourth strong sequentially $X.X posted a the for EBITDA generate corporate up on came across Now and quarter

fourth adjusted for our meaningfully adjusting it’s the Ridge. of important quarter QX Plant our up recent recent our for impact that most to Power In Long remind outage EBITDA everyone two quarters, the most after the said, Ridge Long at results comparing even our was included That outage.

good More of no their in, that EBITDA achieving well importantly, run target. in growth All and this in advancing additional segments target businesses respective our positioned $XXX made during annual quarter, the are capital in adjusted years we a for meet our to progress of million segments four we each substantial the to year with rate of XXXX continue from required ahead.

of producer quarter In each terms in flow segment, the a at us from of XX% to highlights year. million last the adjusted fourth continues up Transtar the substantial coming for be for of with $XX.X quarter, of EBITDA cash

our for under new see volumes Jefferson, refined handle with we expansion the of so Exxon continue volumes to products in export completed increase At contract quarters expect ahead. blade to these the to March, Exxon. in began we

an were largely in required place, new the our At reflected contract to multiyear loss, of a forward. tolling natural that removed forced Repauno commencing in liquids result to operating generate April Repauno, an gas EBITDA sale a Xst, with new to the results adjusted the was contract loss we of inventory on financial profit be prior going expect while tolling

recorded normal continued in, for stage And quarter, setting the a outage $XX.X All operations of good after fourth to ahead. very returned finally, EBITDA. quarter Long we adjusted at million Ridge growth and the

at the which by the on $XXX and $XXX of or which Briefly million sheet basis had cash. billion balance of level. approximately with company issued of at quarter our shown aggregate, issued In $XX at approximately individual March the million sheet. is is the debt guaranteed We asset balance on million on of we $X.X ended a the holding non-recourse XX,

Our of issued a at cost, to event dividends of short, at callable we in view duration years, with In an average and maturity with is the Jefferson debt the not pay asset. ample at interest sale. XX non-recourse Jefferson a non-recourse debt low is long weighted valuable flexibility excess primarily extremely cash flow

I’ll from $XX.X to spend the seven revenue a it adjusted few Transtar and more of on million of adjusted for QX, over minutes of each $XX.X EBITDA Transtar QX of EBITDA segments $XX.X questions. million and million on our providing and posted million revenue slide then with of year. details in $XX last plan up of of turn Starting in supplement.

higher Valley, the from Pennsylvania with returning production temporary U.S. average Indiana carload returned facilities the rate and per for volumes Steel to Gary, quarter blast furnaces at idling. as carload more levels were Mon Both and normal

from to third-party also drive and good at continue on multiple to Steel, we Away Transtar revenue make progress initiatives U.S. EBITDA. incremental

annually We opportunities EBITDA represent expect these $XX to additional little programs investment. of approximately with incremental no million to

of million averaging refined per compared Now QX. in QX. materially, crude oil, revenue $X.X Jefferson. revenue versus QX, XXX,XXX day of and of increased generated of million barrels total products million $XX.X for adjusted on XXX,XXX million EBITDA day to in with Jefferson for to both Volumes and and quarter EBITDA barrels $X.X the in $XX.X per volumes

refinery largest export contract barrels Beaumont approximately of refinery the Exxon’s $X completion the in in Exxon’s to a bulk now increases XXX,XXX XXX,XXX per Beaumont total America. increasing new refinery volume to North were with The the day attributable expansion is day. Exxon March, of by barrels of per capacity billion Exxon

solid at While nearby we made Jefferson’s in on property our Terminal, business grows Beaumont. acquired also recently Main progress

our Jefferson products. renewable fuels an We’re seeing hydrogen-based opportunities ideal And extension the for multiple business. site export storage, build-out, and for is transloading with this nearing full of and

for as We early to addition, as represent Jefferson EBITDA South year opportunity to EBITDA. incremental expect of million to incremental as which ultimately contribute refer new this we to this $XX and up

world’s volume prices. does one trading expose April Shifting Repauno. multiyear using and is Xst, leading the Repauno’s system. on has which transload to gas commodity of liquids X minimum to our contract our not contract, natural commenced We companies Phase The with commitments

commencing by prices. sold of contract, the Repauno a the then its operations existing butane advance recording under inventory, depressed in March sale loss on In driven

order timing, reoccur. was to it in contract something tolling and not necessary ideal expect a not While to we commence

With securing Phase business Repauno Phase tranloading now larger X on having our for commenced, X focused system. is

As slide when years. X our Phase materially expected and system of supplement, is and nine increase comes online the of detailed it capacity to a on our couple storage throughput in

and to annual In excess $XXX million to the generate aggregate, in build $XX once approximately X we of complete. EBITDA cost expect Phase million of to

multiple for goal is offtakers in the our to agreements into We international months. have demand long-term multiple with parties coming and enter

XX% million to up was loss operations. QX per persisted for the QX, included Ridge. fourth bulk for $X.X quarter. on XX,XXX moving plant Power MMBtu and XX,XXX generating in capacity generated averaged in production from that outage adjusted million gas EBITDA of in an the Long Finally, required Long excess plant EBITDA QX, of of which in $XX.X day for power at MMBtu Ridge the the

As our the an stable, the approvals to look we power we capacity. the final initiatives operations expect XXX from plant number while progressed current generation the near-term, for plant gas remainder in coming and of to we XXXX, be both we’re to XX of a megawatts, and production megawatts In profits. upgrade months increase of expecting the to revenue of increase

upon in price curves of annually That incremental current $X for forward will power. million EBITDA range to of contribute the the based $XX million

including center transition we’re and on focused term, behind-the-meter opportunities. longer the seeing increased interest from data developers companies customers, Over energy

up, So to the to about to the start and year pleased wrap we’re come our XXXX excited with in things ahead.

let back to turn Alan. over the With call me that,

open the may you now you, call Towanda, Thank Ken. Q&A. to

Compass Thank you. from Point. Instructions] with the comes Bologna [Operator first of Our Giuliano question line

open. is line Your

Good Steel? that capacity opportunities morning the now I’m to topic, and U.S. Steel in and curious U.S. recovery to on this transfer into with was if back Steel there’s off Transtar Transtar related side. to full that U.S. I’m other if quarter. on Long any great Ridge business Starting up the to the curious

Yeah. -- Transtar, for They back the and back stable doesn’t blast seem -- are for to furnaces normal furnaces all conditions. up be growth. and mean operations to there blast are Hey, opportunity isn’t further running Thanks. there That so and Giuliano.

Steel marine U.S. by and raw Of they then steel And by truck. modes, in by lastly, three and primary finished materials out freight then do rail, barge, that foremost, and course, brings ships products. first

during biggest this handful and of a is the truck to efficient. is traffic Transtar Rail where more opportunity Steel for of opportunities of of I U.S. realize today materially to the those think rail. that on the them with new expect past think we money conversion We’ve opportunities save I year. we’ll we some been working can definitely

So, XX% existing base our incremental yeah, converting rail. freight opportunity to revenue probably trucked opportunity to through from currently certainly, XX%

roughly opportunities on $XX the that Transtar topic and where that staying mentioning you of should you’re drive And third-party the and… great. initial incremental stand working you’re business That’s on million on do

Yeah.

in? … starting of of those some opportunities roll what’s timing the to

say categories. One it’s this third-party the primary year course is XXXX, during two they just of freight really movements. I’d Yeah. in are

We to to transload open of continue that. up some stimulate facilities

least in year, just $X itself facility area Our one Railroad contribute to-date transload one most is That of million. Detroit on million doing the this well. Delray to that’s the revenue $X very successful Connecting will probably, up at up

so transload you of year the could the to sense that impact ideally ahead, of what we open So get in facilities a plan dozens have. for

be in the construction other opening is is repair facility will that a big that component. Pittsburgh got We’ve under Car big and midyear.

and refurbishment, facility will down but the existing opening that later area year. as some We Longview be this have an in that well in needs Texas

sense And into are and be both get revenue. and in revenue. a be fourth so probably for business when third repair time place precise the we pretty third-party by But quarter, incremental opened good those swing quarter the able facilities start we a timing the should generating to roughly in the up you is

up, running, range in million curious, $XX just Ken, business Steel mean, add, $X.X that And million year? outage the to the quarter. the it, million million are or a it, before $XXX call quarter $XX you’re I’m run with the million, great. call quarter rate would by running I $XX back quarter get and That’s of I think, end trends we’re U.S. about thinking kind base still I to the $X.X your ability first the EBITDA a of a million,

year about about third-party million. million car repair. of for Feel if $XX did $XX Really, million more we it. $XX Yeah. good should nothing, and customers The be no Transtar, to EBITDA no

annualize being additional just to of XX%. and furnaces first about all We’re you, some you the quarter $XX be just I the closer growth, normal first million have if the effect the growth, million probably quarter, year $XX the running with volume small of EBITDA. blast growth operating and and And in what full was it taking just rate quarter, should think ahead that today

$XX your incrementally and quarter in of or level we business the end repair million be the $XXX by per should year. to third-party plus $XXX car of million the So to annual an that, at bringing million

great. for okay, the is incremental And where XX on a the -- opening Long application little megawatts? to operating That’s where the topics XX stand up megawatt is bit opportunity to Ridge, switching the

scheduled July either is or be this It approved year. to August in of

upgrade there that largely rooting power to is obviously incremental for and We’re to the no additional bottomline. cost July, because the revenue drops

a in little that’s order there’s we the incremental be the to generate today needed would end purchased gas more or of bit the Obviously, to $XX high but produced $X to million million be megawatts, of at EBITDA. additional

July EBITDA $XX or So it call million August. in starting of

P&L. We have our own on course, of that, half of

So the Ridge numbers third it to would quarter. starting add in Long the $X million

any… customers where and stand the That’s behind-the-meter of I’m And curious great. are or things if there to prospects

Yeah.

active … ongoing at the discussions moment?

would We’re this that construction longer will are have in We be I the light those on obviously new discussions. commencing late projects. year. term facility always active say

would frankly, prospects. mean, a which -- large We very megawatts have are of They’re other they I These require of at power. of prospects require handful significant. XXX each

accelerating you data the They and in data demands a today the the capacity center AI for focused the advent with rush are bigger significant There center power, data have of development on primarily their new and are plans. and players the are to space. space ChetGPT there center developers is is of what some

who particular a dialogue major the the in There’s in all again, We’re closer, significant. players. numbers and is are pretty of with one

be to developments. tend term longer Those

have goal, before months revenue addition from to to new But, place. sign obviously, start incredibly light valuable our to two-year project. of and you next six would so opportunity And three course, up months a an then, one-year at the build is it’s in typically, that some additional point we actually seeing to in the be that once in it

get what Long curious Long And great. the Ridge call per to, you up are That’s $XX.X quarter. $XX drivers saying, million a at for it, look quarter and year to quarter rate $XX $X when million, interest EBITDA a for would Ridge? you’re $XX.X million at to I XX% that a this run you million are it, call million incremental, I’m get or

as customers the Yeah. It but path is either time, It’s that to or just the discussed, $XX take be one annual there. may definitely two that we things. some additional million behind-the-meter would

auctions. basically capacity years, auctions that the million. gets over past Capacity to it’s alone have down Otherwise, return $XX been market. If way couple materially that off normal, close to they us of

been. been run there just where the weak, we’re market It’s next well are weak has our And back from swings I they incredibly year auction our rate. in then That capacity meaning an revenues million have been perspective. right the traditionally incredibly below annual favor capacity $XX think with

guys Exxon with it’s to reach time you good. fully up That Is what over this the not, is then blade and I full if ramped at project Jefferson. curious sounds switching And know capacity? exact am line point, to the

say Yeah. would averaged month We XXX,XXX day every first barrels growing. the I in is per quarter.

second which one to-date, really had quarter quarter largely month to-date, we’ve us, XXX,XXX in of This excess barrels. we’re behind

just handle excess in And of sense XXX,XXX a give capacity we momentum, to day. per have for you to the barrels so

have seeing definitely But, the So quarter volumes encouraging. as increased we’re of second yes, line plenty the we’re very swinging we still trend capacity. here is into and

I I America, plenty it’s would frankly, the my so still excess Exxon, in additional still and there’s Western comments, Hemisphere, and biggest of said capacity, say the as there’s opportunity. refinery North in

and But we the in it. saw momentum capacity rate like April. run and current what the have the We like handle to I

great. much to that then if expected related disclose South is you and on how be the if land expand in Jefferson you Jefferson for That’s I’d curious just if and pay And can South near-term? any can you CapEx there’s

the players Jefferson’s in and than Yeah. the site. the Main bit. acres less a $XX for has from It The tenants We about that XXX acres paid XXX existing it It’s for has on of significant It’s It’s development. -- I’ll major site. Terminal. two a about side little describe available total. million other river are

two The freight two we some for the services tenants, do movements there tenants. tenants, the provide to are minor but

no operating expenses the So site. there are really for net

CapEx certainly doesn’t that to we doesn’t incremental that is that doesn’t impact significant the any it required invest revenue but really opportunity. have site site, until we’ve no done So not incremental generate owning we is EBITDA into generate just site. represents maintain us, contract a will it for development Repauno, that or capital so. There Like at a justifies doing

think first had set third-party do seeking in That secure. our underwritten coming the transloading the now months of some acquired be I be that are will this handful we with a We and of a of with opportunities. to for executing site a first pursuing contract business. we and will opportunities

again, investment. incremental won’t between we one million have near-term. to EBITDA of we’ve and relatively we’ll business. in represent $X will think, and I any capital But, $XX secured a $XX capital until million million investing $XX Again, year the somewhere It probably million be

then, would guess, to great EBITDA be from where at provide from the it rate? year And so per $XX Jefferson an could a now if or sense. you I you million reaching bridge run are to perspective makes That --

those bottomline. Yeah. Yeah. dollars assuming Yeah. expenses are obviously, revenue fixed is, incremental to same and way think and so The simple of incremental incremental largely to barrel, the straight Yeah. drop rate generate our it per volumes, the revenue

average mix revenue it put revenue, to is moved at $X.XX it going per up, per just and bit of rate fourth in barrel. some there’s we storage to average the I try in That said, quarter simple. Just are $X.XX as on -- there’s a a throughput though the first of we to barrels day XXX,XXX keep context, in an

$XXX,XXX generating $X.XX So million of $X.X EBITDA. barrel, at per $XX million revenue and about of

said, have XXX,XXX XXX,XXX, We to barrels per I capacity day. to as handle, almost up

same and rate If $XX the hold in to you gotten that run about there the $XXX,XXX the the rate. quarter of take right we capacity, million double however, $X.XX, just you’ve $XXX,XXX barrel to did per basically first

expenses million quarter. with about don’t about quarter, They the fixed. million portion you’d of to be of $XX in generating $XX EBITDA because generate a significant the million growth are You $XX volume the and that grow in

the said, running. see significant positive quarter We the first we’re less for than currently I $XXX,XXX is As where momentum.

a getting day XXX,XXX path to it I is is but So the to plus that process, per a barrels path, the momentum. like

north running of per We’re XXX,XXX day. barrels

So our we’re on way.

I some swing quarter, that at think to the in third it of we bulk ultimately, there takes the get second into of kind level. quarter, the point

That’s to rate contract went quarterly April it’s now of transition new Xst. live. go, very will contract the be? the be where realize live the -- the where run went or should during contract curious Repauno. the probably I’d then helpful. curious I’m should I butane And the annual quarter that EBITDA be went switching on over first

X Well, is the Yeah. our our target annual The million contract two-thirds X of $XX Phase Phase total is capacity. for EBITDA. for about place $XX in -- million of

single contract, something EBITDA. if to X, it’s quarter, available second the in we’d So annual Phase million assume run the incremental just for annual to which get expect million about that rate. that’s we probably closer of you $X capacity secure is you to $XX The here

Obviously, a for We frustrating. of a had little us. spend it the bit is inventory, was ready market little That -- timing sell new there. some to money quarter We the not was contract. unfortunate bit to had was first get to behind

this in annual Phase to the million can $XX the be per $X.X year, should -- place, black. the hitting, would And to contract volumes run all we’ll quarter secure of it’s existing I rate. capacity say, in if we be second the use X, we or with certainly But half additional million in

securing the X. curious then are for be And Phase the And there if sides on I’d for two you where is… prospects great. That’s

Yeah.

Repauno there’s X than if any Phase And build-out? CapEx at the other

Yeah. No at Repauno. additional CapEx

We’re capital Phase done than need Phase additional outside X the extremely X. there’s well working expansion. Everything’s other of what no be would for and

We question players about the on the is then other the way have large that for I’m a handful the of the It offtake you very asked glad side side. dialogue X. it’s seeking. supply offtake Phase international one on folks, with volumes did, just that were we’re in all a because not you and

they and Frankly, African the and European it’s their offtaker offtaker. The and less propane securing the and offtake Utica seeking then markets. more it’s own volumes Marcellus of of the us in butane course, that is from securing are,

we’re very say with and several would back one forth. I months close been very and several, player, brand and name, well-known of that’s dialogue

We have close two that are others behind.

Look, these confident they’re guys quickly. because are coming I’m years They’re of to least typically at thoughtful, one massive in don’t we’ll terribly committing years of these sign up to course, supply very institutions. to chain. five get They of But move XX months. a the

we’ll I we go to is sure commit It permitted, Once And need ahead in all We go. hand ready we project we think have it the to want we and contract one, and just start commit to construction. is ready the before have finance the one. It’s go. make and engineered, to capital.

debt That’s will the in think on position a And you assets. start great. down and the right to be company or I’m assets curious kind specific of switching then reducing leverage. paying the when

the But this the capital is that our high. debt for debt right time, look, targeting securities of is that high. also now, year. we same to cost prepay later cost the have better uses at At our for our relatively this point, work, relatively capital, We’re way

free We uses our flow. for have pretty attractive cash

point we That’s into don’t cash making debt fourth sense to I and into using repay as quarter start year. something XXXX. necessarily would see at that us swing swing the some this So

be sheet, lower will accretive by position with time cash. The in the mid-XXXX, the we’re balance thing a think, to excess rates I a ultimate at to would lot to highly be a and entire that, we get refinance plan do of

$XXX you, company, different of credit we’re profile EBITDA different and very annually. what a really million generating We’re a very when have

opportunity summer to any But prior highly to it. in if have have do ability the refinancing to so I’d of year. do should I the a our next we we’ll be of the when take thing we advantage And we’ll think lower to. debt that, at accretive love refinance Maybe we prices do things ultimately

you the across or That’s this point? And very helpful. forming any opportunities are at Board, other JV the at looking at assets looking M&A

Yeah. -- I yes. answer the is,

stuff. little looking and Those the at ports looking terminals we’ve always bit of be are been sector in We’re There a tend handful that to a at. more opportunities spotty.

the primarily on have focused some terminals, we energy today leveraging Jefferson and with opportunities We’re platform in of that Repauno. relationships and the

say I’d space. pickup activity last is recent year. rail quiet the in was very most on It definitely the

see own a we a in pickup I’m because to starting for it’s Transtar, of We’re acquisitions. platform thrilled opportunities. phenomenal course,

a more more some Nice highly Transtar. yes, are chunky opportunities rail and And nice but that’s definitely seeing or tuck-in in space we’re the thing. complementary slightly with opportunities that

and the So we’re pleased more for expect and XXXX. yeah, seeing liquidity stuff, little the at I’m market bit M&A a in we’re always of or last that looking bulk fluidity to that

Thank definitely -- you. answering, monopolize That’s the all and back great. there jump I in will the let yeah, you for questions queue. and Q&A answers I appreciate Thank yeah, number but Yeah. the a [ph], me of

No problem. very Thanks much.

like Thank you. I showing Alan. the turn questions back in no now would over to to further call the I’m queue.

forward QX. participating today’s We conference thank Thank after you in to look and all call. you you, updating Towanda, for

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

now disconnect. may You