Excelerate Energy(US:EE)2023-08-10 15:45Financial Performance - Excelerate reported adjusted EBITDA of $89 million and net income of approximately $30 million for Q2 2023, reflecting a year-over-year increase of 33% and 45% respectively [6][20][21] - The increase in adjusted net income and EBITDA was primarily driven by higher charter rates in Finland and Argentina, along with a contract extension at a higher rate in the UAE [20][21] - As of June 30, the company had $462 million in cash and cash equivalents and a gross leverage ratio of 2.6 times, down from 2.8 times in the previous quarter [24] Business Line Performance - The FSRU and Terminal Services business provided stable revenues and predictable margins, contributing to the strong financial results [6] - Excelerate secured additional LNG sales in Bangladesh through spot tenders, with four spot LNG cargo contracts secured year-to-date [7] - The FSRU Excelsior provided regasification services in Argentina and is expected to return to Germany in Q3 2023 [8] Market Dynamics - The LNG market in the Asia-Pacific region experienced muted demand due to improved nuclear availability and healthy LNG supply, allowing South Asian countries to reenter the spot market [17] - EU natural gas storage levels were approximately 87% full, ahead of the mandated target for November 1 [10] - A potential cold winter in Europe could increase natural gas consumption significantly, driving the need for flexible LNG regasification capacity [17] Strategic Direction - The company is focused on developing a diversified portfolio of LNG supply and evaluating opportunities to grow its fleet [18] - Excelerate plans to pursue gas sales agreements downstream of its FSRUs and strategic partnerships with LNG producers to enhance its market presence [29] - The company is also considering acquiring new FSRUs to support integrated offerings [28] Management Commentary - Management expressed confidence in the company's ability to connect LNG to downstream customers, particularly in the Global South, and highlighted the importance of U.S. Gulf Coast liquefaction projects [11] - The company is maintaining a disciplined approach to capital investments while also recognizing the value of returning capital to shareholders [33] - Management noted that the planned dry dock for the FSRU Excellence will impact Q4 results but remains confident in Q3 performance [52] Other Important Information - Excelerate's fleet represented 29% of global sendout capacity for FSRU-based terminals as of June 30 [9] - The company declared a dividend of $0.025 per share to shareholders of record as of August 23 [9] Q&A Session Summary Question: Update on the Bangladesh LNG supply deal - Management confirmed that the government of Bangladesh has approved a proposal for Excelerate to supply 1 to 1.5 MTPA of LNG for 15 years starting in 2026, aligning with the delivery timeline of new vessels [2][31] Question: Clarification on the dry dock timeline for the FSRU Excellence - Management indicated that the FSRU Excellence will be off-hire for about 50 days during its dry dock in Southeast Asia, with related expenses impacting the income statement [44] Question: Strategy regarding LNG carriers - Management is actively considering both long-term charters and acquisitions of LNG carriers, depending on supply procurement strategies [46]