FTAI Infrastructure (FIP) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $35.2 million, up 21% from Q4 2024 and up 29% from Q1 2024 [6] - A non-cash gain of $120 million was recorded due to purchase accounting adjustments from the acquisition of a partner's 49.9% interest in Long Ridge [7] - Total debt reported was $2.8 billion as of March 31, with corporate level debt unchanged at $572 million [13] Business Line Data and Key Metrics Changes - TransStar reported adjusted EBITDA of $19.9 million, slightly up from $19.4 million in Q4 2024 [9] - Long Ridge generated $18.1 million of EBITDA in Q1, up from $9.9 million in Q4 2024, with a power plant capacity factor of 99% [15] - Jefferson's EBITDA was $8 million, down from $11.1 million in Q4 2024, impacted by four storage tanks being off lease [18] Market Data and Key Metrics Changes - TransStar's revenue was $42.6 million, with stable volumes despite uncertainties in global trade [14] - Long Ridge's March EBITDA run rate was over $10 million, indicating strong performance following recent transactions [10] - Repauno's Phase II project is expected to generate approximately $80 million of annual EBITDA upon completion [20] Company Strategy and Development Direction - The company aims for transformational growth in 2025, driven by Long Ridge activities and other strategic developments [7] - Focus on acquiring complementary railroads to diversify revenue and enhance growth opportunities at TransStar [15] - Long Ridge is exploring data center partnerships to generate additional EBITDA while maintaining existing power plant revenues [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the year ahead, citing strong performance and strategic opportunities [7] - The company is well-positioned to benefit from increasing energy exports to Europe, particularly through Repauno [35] - Management highlighted the potential for significant EBITDA growth from new contracts and operational improvements across business units [19] Other Important Information - A quarterly dividend of $0.03 per share was authorized, to be paid on May 27 [5] - The company is planning to refinance corporate bonds and existing preferred stock to reduce fixed charges and increase cash flow [13] Q&A Session Summary Question: Timeline for CABERON approvals after the public hearing - Management expects a typical thirty-day process post-hearing for approvals [24] Question: Types of data center deals at Long Ridge - Discussions involve leasing land and providing backup power to data center developers, potentially generating $70 million in incremental EBITDA [26] Question: Update on the Nippon deal and its implications - Management is optimistic about the Nippon acquisition of US Steel, which could positively impact TransStar [28] Question: Impact of tariffs on business - Management noted mixed effects, with some businesses positioned to benefit from changes in global trade dynamics [34] Question: Remaining capacity for contracting at Repauno - Limited additional capacity exists for Phase II, but Phase I has potential for increased utilization and additional EBITDA [40] Question: Incremental earnings from the 20 megawatt increase at Long Ridge - Expected to generate approximately $8 million of incremental EBITDA upon approval, likely in late 2025 [43] Question: CapEx requirements for TransStar's EBITDA growth - No significant additional capital required; growth will come from existing operations and new customer engagements [47]