FTAI Infrastructure (FIP) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Fourth quarter adjusted EBITDA prior to corporate expenses was $42.4 million, up 32% quarter-over-quarter, marking a new record for the company [15] - For the full year, adjusted EBITDA reached $140.9 million, a 60% increase from fiscal 2022, also a record [15] Business Line Data and Key Metrics Changes - Transtar reported adjusted EBITDA of $23.6 million in Q4, its highest quarterly results since acquisition in 2021, with EBITDA margins exceeding 50% for the first time [17] - Jefferson generated $14.3 million in adjusted EBITDA for the quarter, also a new record, with significant volume growth and advanced negotiations for new business opportunities [18][24] - Repauno's adjusted EBITDA loss continued to narrow, with significant progress on the Phase 2 expansion project expected to transform long-term EBITDA generation [19][29] - Long Ridge generated $5.1 million in EBITDA in Q4, down from $8 million in Q3, impacted by a planned maintenance outage and lower gas prices [30] Market Data and Key Metrics Changes - The M&A market is described as more robust, with increased demand for assets but fewer available targets, positioning the company favorably [2] Company Strategy and Development Direction - The company is forecasting to exceed a run rate of $200 million in EBITDA during 2024, driven by strong performance across its business segments [16] - The company is actively pursuing new business opportunities, particularly in clean fuels and hydrogen-based products at Jefferson, which could significantly enhance EBITDA [27][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macro outlook for modern, efficient power plants, particularly for Long Ridge, as demand for data center power is expected to grow significantly [20][33] - The company is confident in its ability to refinance its corporate balance sheet during 2024, which would reduce fixed charges and increase distributable cash flow [21] Other Important Information - The Board has authorized a $0.03 per share quarterly dividend to be paid on April 5 to holders of record on March 27 [14] Q&A Session Summary Question: Insights on the railcar repair facility - The railcar repair facility, a $20 million project funded by the state, is expected to generate at least $10 million in annual revenue with EBITDA margins of 30% to 40% [39][40] Question: Impact of U.S. Steel sale on Transtar - The sale of U.S. Steel to Nippon Steel is viewed positively, as Nippon is a stronger credit and will assume existing contracts [42][43] Question: Details on the $75 million new initiatives at Jefferson - The $75 million includes contracts for ammonia and hydrogen-based fuels, with Jefferson South expected to become a hub for clean fuels [44][46] Question: Status of permits at Repauno - The permitting process is ongoing, with expectations to receive permits in the second half of the year, which will significantly enhance Repauno's value [47][53] Question: Gas prices and production plans - The company prefers to see gas prices at $2 per MMBtu before committing to large-scale production, with current prices around $1.50 [55][56]