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New Fortress Energy(NFE) - 2024 Q1 - Earnings Call Transcript
NFENew Fortress Energy(NFE)2024-05-08 18:17
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Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of 340millionforthequarter,aligningwithestimatesandtrackingguidancefortheyear[1]−GAAPnetincomeforthequarterwas340 million for the quarter, aligning with estimates and tracking guidance for the year [1] - GAAP net income for the quarter was 54 million or 0.26pershare,butafteradjustingfornonrecurringcharges,netincomewas0.26 per share, but after adjusting for nonrecurring charges, net income was 138 million or 0.67pershare[89]BusinessLineDataandKeyMetricsChanges−InPuertoRico,thecompanyhassecuredan80TBtuisland−widecontract,increasingtotalcontractsto105TBtu,whichrepresentsasignificantportionoftheisland′senergyneeds[18][60]−InBrazil,thecompanyhas12MTPAofLNGimportcapacityandcontractsfor2.2gigawattsofpower,leadingtoaprojected0.67 per share [89] Business Line Data and Key Metrics Changes - In Puerto Rico, the company has secured an 80 TBtu island-wide contract, increasing total contracts to 105 TBtu, which represents a significant portion of the island's energy needs [18][60] - In Brazil, the company has 12 MTPA of LNG import capacity and contracts for 2.2 gigawatts of power, leading to a projected 500 million contracted EBITDA on a run rate 2026 basis [32][42] Market Data and Key Metrics Changes - The company highlighted Brazil as a major opportunity, with a forecasted need for 20 gigawatts of firm power to be added to the grid by 2032, including 8 gigawatts to be auctioned this year [78] - The energy consumption and natural gas consumption per capita in Brazil lag significantly behind developed countries, indicating substantial growth potential [39] Company Strategy and Development Direction - The company aims to accelerate the transition from distillate fuels to natural gas in Puerto Rico, which is expected to save ratepayers 1billionannually[19]−InBrazil,thecompanyisfocusedonprovidingreliablepowerandflexiblefuelsupplytomeetthegrowingenergydemands,leveragingitsLNGterminals[38][52]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthelong−termgrowthprospectsinPuertoRicoandBrazil,emphasizingthealignmentofthecompany′sstrategywithpublicpolicyandeconomicneeds[62]−ThecompanyanticipatessignificantgrowthinEBITDA,potentiallydoublingtonearly1 billion annually [19] - In Brazil, the company is focused on providing reliable power and flexible fuel supply to meet the growing energy demands, leveraging its LNG terminals [38][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects in Puerto Rico and Brazil, emphasizing the alignment of the company's strategy with public policy and economic needs [62] - The company anticipates significant growth in EBITDA, potentially doubling to nearly 1 billion by 2028 through its operations in Brazil [42][54] Other Important Information - The company is in the final stages of commissioning its FLNG unit, expecting the first cargo in June, which represents a significant operational milestone [55] - A recent incident involving a pipe fracture was reported, but it is expected to be repaired quickly without significant impact on operations [43] Q&A Session Summary Question: Can incremental Puerto Rico growth beyond the 80 TBtu contract be linked to liquid fuel pricing? - Management indicated that the current contract supports the transition and that future contracts may migrate to a Henry Hub index as the market evolves [72] Question: Thoughts on adjusted EBITDA performance and the impact of the FEMA contract? - Management noted that the settlement from the FEMA contract would primarily contribute to earnings, and the transition to gas is expected to occur rapidly [75] Question: What is the forecast for firm power needs in Brazil? - Management highlighted the Brazilian regulator's forecast for a need for 20 gigawatts of firm power by 2032, with ongoing capacity auctions [78]