Excelerate Energy(EE) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $107 million, an increase of approximately $7 million quarter-over-quarter, primarily due to the addition of Jamaica EBITDA starting from May 14 [26] - Year-over-year adjusted EBITDA grew by $18 million, driven by the addition of Jamaica EBITDA and the strength of the legacy business [26] - Total debt, including finance leases, stood at $1.3 billion, with cash and cash equivalents of $426 million as of June 30 [27] - Net debt was $867 million, with a trailing twelve-month net leverage of 2.2 times [27] - The company raised its adjusted EBITDA guidance for 2025 to a range of $420 million to $440 million [31] Business Line Data and Key Metrics Changes - The Jamaica acquisition included the Montego Bay and Old Harbour LNG Terminals, which are already contributing to earnings [12] - The integration of Jamaica assets is proceeding as planned, with operational performance exceeding expectations [12] - The company expects to generate $80 million to $110 million in incremental EBITDA from optimizing the Jamaica platform by 2030 [14] Market Data and Key Metrics Changes - The company is positioned to benefit from growing demand for LNG tied to energy security and the energy transition [8] - The recent US-EU trade agreement is expected to expand LNG exports, reinforcing the relevance of the company's business model [9] Company Strategy and Development Direction - The company remains focused on operational excellence, disciplined growth, and delivering long-term value for shareholders [4] - The growth strategy includes owning and operating downstream infrastructure assets, with a long runway for growth through strategic opportunities [6] - The company aims to position Jamaica as a regional hub for LNG distribution across the Caribbean, leveraging its geographic location [16] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of energy security for all nations and the supportive policy momentum for LNG exports [9] - The company is confident in its ability to capture new demand and grow from the Jamaica platform, with positive reactions from customers [40] - Management expressed optimism about the global LNG market, particularly in Europe and Vietnam, highlighting ongoing engagements and potential investments [101][102] Other Important Information - The company announced an increase in its quarterly dividend on July 31, reflecting enhanced cash flow from the Jamaica acquisition [29] - The capital allocation strategy prioritizes investing in accretive growth opportunities while returning capital to shareholders [28] Q&A Session Summary Question: Priorities for Jamaica projects and expected EBITDA contribution - Management indicated that there are both near-term opportunities that require minimal CapEx and longer-term projects that will require more investment [36][38] Question: Opportunities in the Caribbean and specific markets - Management noted that many Caribbean islands are still reliant on liquid fuels, presenting opportunities for fuel switching and LNG distribution [42][44] Question: Addressable untapped market for gas in the Caribbean - Management acknowledged significant demand but did not provide specific quantifiable figures, emphasizing the competitive advantage of their assets [47][48] Question: Supply and demand outlook for new builds - Management expressed confidence in the tight infrastructure market and increasing demand for LNG, positioning the company well for future growth [51] Question: Timeline for FSRU conversion and cost savings - Management indicated that the conversion process typically takes about two years, with potential for timeline compression due to existing equipment [60] Question: Incremental CapEx for smaller receiving terminals - Management stated that it is still early in the assessment of costs for smaller terminals, emphasizing flexibility in solutions [63] Question: Intangible assets from the Jamaica acquisition - Management clarified that the intangible assets primarily consist of customer contracts [66] Question: Key milestones for Jamaica platform - Management committed to transparency and will provide updates on incremental sales and optimization efforts [71] Question: Financing for Hull 3407 - Management is evaluating various financing options, including cash, revolver borrowing, and potential ECA financing [80] Question: Cost savings from owning the LNG carrier Shenandoah - Management confirmed that owning the vessel will enhance returns compared to chartering [87] Question: Breakdown of EBITDA guidance for Jamaica - Management indicated that the guidance includes both synergies from existing assets and new opportunities requiring further CapEx [90]