FTAI Infrastructure (FIP) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2023 was $36.2 million, up 20$30.1 million in Q1 2023, marking a record result for the company [31] - The company ended Q2 with $42.5 million in cash and$1.3 billion in debt, with a slight increase in total debt post a $100 million issuance [22][53] - Revenue for Transtar in Q2 was$42.5 million, with adjusted EBITDA of $20.3 million, up from$41 million and $17.2 million in Q1 respectively [33][52] Business Line Data and Key Metrics Changes - Transtar's adjusted EBITDA increased by 18$10.4 million in adjusted EBITDA for Q2, down from $11.3 million in Q1, as gas production was limited due to lower prices [57] Market Data and Key Metrics Changes - The market prices for gas in the region are between$1.30 to $1.50 per MMBtu, with the company targeting production increases when prices exceed$2 [12] - The company is seeing increased interest from behind-the-meter customers, including data center developers and companies focused on energy transition opportunities [1] Company Strategy and Development Direction - The company aims to reach a run rate of 200 million in annual adjusted EBITDA by the end of 2023 without additional capital investment [21] - There is a focus on securing long-term contracts for clean fuels, with a new 15-year contract for hydrogen-based clean fuels at Jefferson South [35][65] - The M&A market is becoming more active, with the company reviewing numerous investment opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 30 million of incremental EBITDA opportunities at Transtar, with $15 million to$20 million already in a good place [7] - The company anticipates continued growth in the second half of 2023, driven by new contracts and operational improvements [21][27] - Management noted that the completion of the new ship dock at Jefferson will significantly enhance operational capacity and EBITDA growth [64] Other Important Information - The company declared a quarterly dividend of 0.03 per share to be paid on August 15 [51] - The completion of the second ship dock at Jefferson is expected to facilitate substantial increases in volumes entering the second half of the year [24] Q&A Session Summary Question: What is the expected EBITDA growth for the remainder of 2023? - Management expects to maintain 20% EBITDA growth from segments and closer to 25% after corporate expenses [59] Question: What is the contribution of third-party EBITDA to Transtar's reported figures? - Approximately 10% of Transtar's EBITDA is attributable to third parties, with plans to increase this contribution [60] Question: What is the anticipated EBITDA from Jefferson in the near term? - Jefferson is expected to reach a quarterly EBITDA run rate of over 10 million starting in Q3, driven by the completion of the new dock and new contracts [64] Question: What is the current M&A environment? - The M&A market is becoming more active, with the company reviewing many investment opportunities and expecting to see results in the coming quarters [14][68]