NFE - Earnings call transcript Q1 2020 | New Fortress Energy Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the New Fortress Energy LLC First Quarter 2020 Earnings Conference Call. . At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Instructions] [Operator

like Andreini. conference ahead, Thank now speaker to sir. hand Alan today, you. to would over the your I Please go

Alan Andreini

to Thank welcome LLC would I Quarter the all First Call. you, Energy New Earnings like XXXX Fortress Gigi. you to

Wes are Chief of our our CEO Officer; Development Officer. and Brannen today the here and Chris Board; me Edens, Joining Chief Guinta, Financial Chairman McElmurray, our

supplement we Fortress that going the was Energy to call, to are the earnings Throughout New posted the website. reference

already I'd suggest not download done now. you have it you If so, that

addition, some earnings In the reconciliations non-GAAP measures during measures the we measures most GAAP in those found supplement. The today. financial can will be be comparable directly discussing the of to call

point statements, you regarding results. certain be uncertain out measures to report today presentation will our Before filed investor nature review regarding by materially encourage in quarterly statements including made from that Wes, with release turn I factors call to and disclaimers over statements the forward-looking the and contained the earnings. may to differ are to non-GAAP SEC. their in These future and actual statements risk We review our like financial the I would forward-looking and press

would to to I call Wes. the over Now, like turn

Wes Edens

diminished to is Even last these things Great. as of like I'm one power that, had it's times about. every those and gas and continue them. and preparing customers. for remain little to they start essential our financial showed bit And everybody a I them and the was over aggregate benefit of deal have and our up by service us. as in Two honored But terrific every days. very although, times as actually had this with a couple day in customers. takeaways to Thanks with showed are got sharing thoughts They a the each we main And difficult for here foremost day. couple the still difficulties volumes very people, for talk that, and and folks up the thankful the really feel first result to I'd Alan. just Thanks services lot I before into down from to a dialing I've in. quarter, them we for of I they go a day every goods

to start us. as very done we had grateful the we a we I'm great a that, are essential we small place of got have are the that what because for in to work because sheltering part and in people no needed is that of and them. result, very day up and people workers Two to and for especially showed people off good There's for in every a the get quarter those no fields year these done. we're We

As times workers the recognition months this. for jobs a very, proud raise be they a assistance. do applied And very furloughs. our layouts the of able organization of of for result was the fuel of to May and to salaries haven't government of doing it that April the in the able We our activities, or any actually were by we had We no XX% got mass that and was. to were I'm part

In crew skeleton to York with coming here. New I've the City, day every work been

to the shelter does well. crowd business Our not well at-home as particularly translate

put and the dog. just productive making managed we'll a some And to infrastructure and been accomplish we be we in here go the on very, I'm have to very Brannen But that, what people quarter we as while, through in with trying adjustments of clean my productivity And we to shaved here, we good the shirts. have. say had of we've happy actually at and pipeline home so both and terms in both some we've and detail people build in have can that that Chris

this So that having is call they obviously a we here. Zoom thought were this morning

There's this. and industries in revenues literally never no had life been Many whatsoever. my companies quite a like shutdown

very times that that these to new and indeed. pipeline Puerto we're extraordinary we in that maintain is our at and Rico, get have in have the and So have fortunate this remarkable But and online very, that infrastructure complete revenues both. company business record profile the we

And briefly. on listed them let's number start that, X. with page Highlights, presentation month. go and through turn by just to we'll So I'll the this I let's

upside day; April So per goal we average is volumes million X.X January XXX,XXX; February is our per business all about March gallons million the that one we XXX,XXX generate. XXX,XXX; gallons the million of day, X.X significant gallons of XXXX, that there's handful outcome are on progress depending to right and remainder the per now. to day a in of that the things for

on fully Harbour business suddenly Old world its own gas. attained Bay or Juan very Montego pipeline The new The operational. San electrified has not complete are own and robust. its gotten remains

We'll a there's obviously for customers, are new lot there. of COVID has still prospects essential out it our about gas So and talk goods. us there. impacted power but business

And So each has of see measurably. time X. terminals one you is page This these number has grown come over and the as volume chart. online can

quarter Rico And came first got Montego just from Harbour of constant. fairly first organic terminal as these to other Nicaragua XXXX, go year. So the terminal Puerto a been development Mexico so are our back last we was see. midpoint as they terminals. ago. Bay of new first in now existing or and we've developments Old it's came on growth The well under you both online the month in And

our an million grow departure $XXX a for To to chart important of one is one business a three got margins translates that chart illustration which of is of day a on the with Obviously, good that at that million ranges give that. side sense point the annualized simple day a from basis for the right-hand It's $XX line on from go million. gallons to how the gallons results gallons you some dramatically. millions million of us

today. one days. through million, are billion We of couple that days last those X.X gallons X.X of million, about averaged We X.X each

new that with today business that each only successive online it through well from comes we're So there. grows opportunity

I've X. diesel. I've COVID competition lot a of of and gotten about number obviously between lot gas gotten questions the and Page questions a about

my And explain so this significant are about average, attempt that. their been XX%. have Customers and is On to gas power. still of using reductions volumes

those So very travel and as been are and transportation of their you'd a our businesses lack impacted expect have are by of impacted derivative obviously meaningful. are we have been hotels still volumes customers' but down, that

with that the back itself way. it destruction what is, economies been world, online tremendous. goes of The the flights oil has markets. I come There's people down without a is the the collapsed. of lot of diesel delivered and at without two-thirds did we as demand LNG to much can of tremendous. approximation and things trucks looked all XX% lot destruction absolutely when collapsed versus at in the demand driving has oil obviously, transportation price going a course other went business simply – price the in look on – reverse is have prices good Oil The burned cars business world of ships is there. of around But tried these. This of once the both the that these news in on make the But been our in airline delivered back I you going oil

XX diesel I last last And days see the XX burn went five averages back MMBtu; XX would years can made only years gas. more you to over that to than There's and natural looked over burn the in in which have the years. $X.XX. last last sense the $X.XX XX years of

So intact. And it. our value of remains the course of is, proposition beginning this just

your lower have environmental In profile of addition, much you've equipment. maintenance much, got better you much

very our pullback position a oil our seen We've to good from customers feel gas. we and about So this. switch with from considering whatsoever no

pipeline optimistic can't night They business so the on Page shortlisted that Saturday notified number late early robust. power something to of or on Sunday. But we Rico about. on, be that's position the expect very We're we make Puerto I X, in next for continues are guess, that weeks, comment couple We're of that, to the RFP. obviously. temporary that decisions new

world Travel Minister soon. yesterday. the become very Zoom later profile they'll up We've calls. think an very one hopefully We still ease it challenging, I Energy around I've footprint, with but familiar well. fits here with and very our obviously are call had limits got morning. Zoom a this

world that So, I'm everyone new adapting ease this But soon. travel. without is being to that able to will hopeful

LNG bring they for portals -- bring -- to company power us are the for around and world. the us terminals These and

prospects our the I'm the for going we is we've on regions the year. in very, actively green, XX particular that shaded discussions Our in five previously And highlighted, rest the on. as optimistic are very ones about that I've have of focus here

to operations. let terminals Brannen, over talk to me So with that, turn about it and

Brannen McElmurray

and good accomplished we bet. You for excited what you Thanks morning on last joining, as we've thank update very X, Wes said, Flipping spoke. to we're since you Wes. to page all

and our completing Bay, terminals a they Unit of more growing on And successfully portfolio, adding a our Jamalco. be long-running were We to Juan could on complete. finished And asset PREPA. not X converted San so focusing excited. Mo terminal X, Juan page to X gas, with facility our and marquee San are Old natural run along goal Harbour

at in at demonstrated commissioning deliver workers had emissions save is to and customers, on Now, without on diesel. the versus the significantly Power over incidents. over most to in safely And importantly, Station we peak Wes XXX our site reduce completing runs we times, megawatts at PREPA of even as we of had construction which commitments San alluded millions of is and and beginning can XXX that activities, Juan the natural to the dollars gas, call, most expected challenging

of showed have And those appreciative all greatly and they done. we're dedication employees tremendous Our partners that and of our commitment.

infrastructure most company tremendous a critical as our adding we further challenging a reputation deliver to in go-to period, critical the As showed provider. infrastructure to resilience

Juan XX, a believe, option a and transition growth is there's opportunity page is our diesel facility Puerto to strategy San strategic providing significant with Rico, Puerto power that island. our to Rico permanently PR's gasify towards a plan step to its tremendous the across respect complementary from infrastructure. highly compelling to to HFO, to Turning specifically, We modernize

as we week have over averaged gallons And per XXX,XXX few Over and continue up. to past XXX,XXX over X as day, X high per gallons the as we've ramp seen the Units -- day. past

to a million about serving In to industrial gallons customers. next for door can that plant day, X-bay delivery the per addition system have truck we loading load one power

first And adding names Coca-Cola others. our marquee and weeks. serve in to few such expect just to We that as a customer we'll be

successful be significantly depending to, we demand. alluded would Puerto Most on significant additional that if Rico capacity more the facility in additional dollars built-in we can terminal serve add, added the as to demand itself how over additional power process to Wes that no need to though, And has expect to the itself goes, time. that current serve

efforts, the a in on page over is challenging Zero, asset snapshot being the environment which on last flipping this good no communities, over the page such you XX of priority, operational moment, safety our news. just of Now first as months. -- area. And to welfare few which particularly operate. an the in this of operational most a in performance, and day, that have perspective, health the we redoubled people in most to we news is is give numbers, important number steward focus probably In our from a top single the period we good is a every the the the

report terms are operational business and activities. side. to our recordable and continue every ones day out. we a And to support to help truly the in to on day the terrific the incidents They look in happy do operators achieve of face our their that continue critical I'm customers our that job day our to of Zero,

our numbers they The page our is no point reliability we can have that of would to of that disruption the continue which such customers is are I we you numbers ensure exceed other to serve because than critical a the customers, actually point more which service. on and availability reliable

incidents. and we providing tender first benefits and metrics, responders are rack of such customers that all for and more what without do. power we an important services aspect and needed fireman the truck that's who loads our up rail and policeman such provide hospitals the to continue And now more On critical to simply

So X,XXX right maybe little more. now a bit about we're

Puerto record job transfers without track a over actually continuing I morning manoeuvre a of watching incidents ship-to-ship terrific operators. in video have XXX-plus morning, was no incident. again by of We this our This and ship-to-ship Rico a our

Western the company the transfers and have to We ship-to-ship in most short Hemisphere. of ship any

strive and to side But as the we improve. always operational on continue

are We better we at better get at technology trying data do. looking just and technology and how information technology what analyzing implement to to are

about financial it performance. so over Chris, I'll the talk to to And now, turn company's

Chris Guinta

Brannen. Thanks, to It's all morning. you with this talk great

number walk XX, like If financial you XXXX. slide QX the to I'd for turn to you results through

the online line forecast excited per of increase day, achieving volumes XX% very that for from in in plant running our than by has first for last this coming XX during been volume and gallons over driven load our with QX. average are the quarter XXX,XXX CHP announce the Jamalco XXXX. an operating quarter We to QX over increase from and base daily was same at more the is volumes days. COD capacity The The and in is double plant

This date. slightly decrease Puerto Henry by of quarter Revenue is Hub price highest revenue activity which construction was in the the average quarter lower our result and but increase by for in a to revenue for a $XX a recognized million offset the volume Rico. was quarterly

sales cost to volumes. Our higher in was of increased due O&M

However will see of of grow as the to our nature account we massive shipping continue and expansion OpEx. cost terminal we margin fixed on

the million $X and quarter of costs. $XX exclude million of per non-capitalizable compensation forecasted, when Our $X development-related was right expense expense million SG&A you stock-based at

we $XX by During term QX, million that Apollo of expensed extinguishment debt onetime was had the about closed in early loan we also when related provided to million facility that $XXX January. our costs of

to business Page XX, to discuss we make plan efficient. advance will how we our Flipping more our

our one, be operating increased at look and we where how main are our scalability. can and expenses to today what categories, of SG&A online XX%, capital more four approximately that we be million annually we are close made-up to refined of expected these flows are a do spend can to our profitable. number the which Now and Over which expense, $XX productivity taking be cash operating is achieve

are current XX% we approximately $XX $XX at complete a needs more that and significantly for We goes expense to cost borrow we of Number we expense a three, bottom-line. believe hire lower. the our Number an drive cheaper can we but refinancing annual lines can five these costs focusing have basis is able interest annualized today are two, three this or uncontracted. of $XX we vessels straight on shipping by will around on and which our once down on currently million save LNG come Number are capital. million think that million to over four, the

opportunity Securing of focus tune a long-term supply increase to at low the prices is dramatically to primary of dollars. and represents billions a big earnings

of right the the the on Briefly page, we side demonstrate this sheet. balance strength of

As $XXX is hand the plus cash our and volumes fully with activities. which on of operating committed LNG CapEx cash our current committed over all combined funds from XX, million, inventory March of flows

committed presentations. This XX. we've cash volumes our the that page in It prior the and to flows. impact Turning of our ramp on is slide earnings included the demonstrates

be hit do flow include to formal to is intended as mentioned cash run not guidance any have have that capability these it assets demonstrate this material they while we As rate. before we

annualized annual next graph summer. you and note as in how over excess volumes shows ramp It's will $X over operating million include to we NFE we see to billion can expect earning cash in exciting contracting and year $XXX to Nicaragua, million continue committed from new of to The committed on alone; be Mexico execute this clearly well volumes $XXX when we that margin. flows

With turn Wes. back I to it that over

Wes Edens

The questions. Operator?

Operator

Instructions] [Operator

question Securities. the Joseph line from first Our of Osha from comes JMP

now open. is line Your

Joseph Osha

two I I for the Thanks to is line. of have everyone I front questions. Hey. the hosting hope made it call. the okay.

a still out as out right you've higher-cost Obviously, First, supply guys you've been pointed exposure. point you deck open that working Wes you're now. some got in through the you

the we how quarters? wondering I'm expect trend over of So next the cost might that couple goods of reasonably to of see course

Wes Edens

bit basis think then event outright We charge what we we've for quarters, of on a of we gotten an contracted any cargoes a can do that -- And extra cargoes but we But total use them assets either lower burning. particular. against actually it we're or reflect now. modestly don't couple in for is in cargoes next pay out that margin --it will the In need over And Jamaica actually have that has Rico. that the sell I the what couple into will financial extra actual gas that Puerto a that that the excess comes right little in supply you'll with rate is swap we we the run see those have underpins volumes that lower volumes do worse. in price the got

confuse want fairly effectively the them one So undersupplied assets important run board. I But think rate a of in I business what of across to financial with oversupply aspect don't the is most the and operational we're just performance which short-term the the entire the of the is case. XX%

we have will the that and And prospects in short-term wood a -- with knock grow. got in we've only that the so

a do have of market opportunity good big to we some the it things price with the gas. on really is So where some

Joseph Osha

it a I'm and then Chris given Okay. and might assume supply there more. don't going because just out trying roll your this follow-up about this sense And But strategy it's off wouldn't we buy to maybe want go out. contracting make I'm gotten? point existing to as go you to at that how spot heard talk forward. let understand cheap I confused probably

Wes Edens

And we to said Puerto get a now for is did as exactly what it's go sure their period basically and a is performance time and to once want their what at that that needs. right No settled strategy. assets operational Jamaica. in when of be look in we and we we'll we what before them understand longer-term That's the in going measure up that then Yes. then of run Rico we is and are they make

do think that And what in Rico. to planning that's exactly Puerto I we're

this in and of have case couple an do we extra -- So cargoes.

So there's swapping more out and go And undersupplied we're still as good in out we could a less But impetus consider. an there things market. be I more right now a and or bunch supply. of to rush buy very other said might

positive that's a for net-net huge So us.

Joseph Osha

I in you. jump back Thank will queue. Okay.

Operator

Thank you.

question the Greg line Our BTIG. of comes next Lewis from from

now Your is open. line

Greg Lewis

it's good any power that -- Yes. morning. and related to RFP, now to you, fill needed Rico would about that? question be temporary Right Puerto guess, thinking there that Thank is first requirements be just realizing we competitive additional CapEx or my it is or RFP process. I the temporary how should a

Wes Edens

Well, I an of can what of Xth one of is the southern the stations power on and earthquake tell the you that January the was that shortage. this created in that was Rico what's took in main public there out Puerto part country

they're into As gap. to very moving months they're cover the summer obviously keen that

service of don't the they a disruption So as months summer up. have heat

even less that with And COVID and still travel to with reduction have a they're a they of activity deficit trying significant cover.

we've of that's And weeks. locations. standing in the the specifically that what happens of a power place process are infrastructure optimistic have And equipment What running. asked equipment we've and that position being we'll various see on like they've offers -- in that's feel good got next and couple without I'm obviously, about locations those in the process. with that competitive number got and it the a it in on made we industrial logic offers they're the So specific of for about terribly

big days So next good I But supposed be sometime it all so the Ricans, to XX an or them. at them. the that think there's solution plays results out. for how a notified viable and And news hope for of see that to very we'll in really I good economically in two you're weeks to the part a for solution be we is Puerto think a one

So we'll find out soon.

Greg Lewis

the amount the And of or actual potential the then that size no? available amount – is was power in like of project terms

Wes Edens

this had does public do. last as large significant XXX needs. the are very call gas. fit them bring and two which whatnot bringing ranging and talked mobile in with then Those megawatts turbines which and We megawatts. things power It two estimates Those I've what combination we pricing meetings is in of locations. in kind seen notion of different sure power a combination they'll about fast with well in to -- combining allows are small our as into from don't know very of as is for combination what potent very us XXX as obviously these efficient fairly

power for will if us. be going So looking at only assets course of existing of not be where think huge want do got other in kind our the we're many And successful forward this a and to but around or talk good a power you building have short-term of can arrow world that I longer-term markets service about today. quiver test countries projects, needs

think this is we'll And aggressive this enough could of put on about then We've And which to and can be be as and example happen draw to power experience for some have for the effort real-life world. so exciting. we're proxy really as what that notion thoughtful if around a fast other trying at is look amount some is selected, to to I into something tremendous as applications this then we be. real-life fortunate a

really, really a good it's So situation.

Greg Lewis

much. you Thank Okay. Perfect. very

Operator

Thank you.

of Morgan Sean question next line the comes Evercore ISI. from from Our

now is line open. Your

Sean Morgan

And had of biggest is obviously in what trend cost that what spot see we the I the could improvement and we do -- question. one fixed that an -- $XX what We slide flexibility of could and how guys. floating? much have Hey, that is -- I'm with a there? see XX of at model, of in million proportion look you wondering like is portion the cargoes sales

Brannen McElmurray

Yeah.

you. talk to sales LNG expense. good is the The of that cost to So, the I'll the answer obviously of bulk one. Sean,

on to sales XX% to to about ships XX% X% you and of think when of LNG about OpEx So terminal. is about depending it each terminal is the cost is XX% XX% total XX% your

buy our market answer as below we've shown we I in basis first $X.XX we'll at that's in think supply lower the in prices, to as - more that forecast. first upside earnings. the said to And material our question, the Wes

in As due purchased that largely we you through. see QX, burning have legacy it's these we cargoes and are numbers to the

Wes Edens

Well, this one burning if I obviously accomplishment. operating COVID which $X things, so this converted the those handle very in Vince, profitable time, online overstate run. short is that's can't that the and units is because fuel you're good buying getting extraordinary a that, important with facilities terminal it's of about during an the a and venture into

to we of as short-term Now, it prices. said, But burn come be normalized. $X.XX. numbers Chris the more that But down low fairly expect the we on you'll take substantially, use model more in our these aggregate the advantage we and of see

a turned us. getting So is for financial big really on deal

Sean Morgan

for charges buying the we're on we demand expect a take that little do of bit appreciate of it think will the disrupted has cargoes line? the in for a year? these less quarters Like scenario full kind excess now. can should what's And long then, I because economically magnitude might you fully with facing or the terms fluctuated and COVID-XX, What's been charges? obviously for charges have And the how right few you than time of next

Wes Edens

just things of kind get couple really quarters out. as next It's of the ironed

to kind organic so down the the them little the impact down think revenue. of a way numbers, bit I of XX% think I with are COVID

majority vast world. you or companies go expect not we in volumes in great. of the the there infinitely of out down is terms than countries better on It's So, what obviously XX%

X right and now. to now, million, XX% think per now generate of expect would something we That's million, So, differential in million, kind is million X.X to right range. million day X.X that X.X average the X.X the we something system our gallons

on basis. overbought we're so And slightly that

and Juan Those terminals inorganic, X, greatly and the et increase of Mexico, terminal The which the X cetera. gas. new demand Nicaragua, like functions, our then in actually San step like for additions plants are

So operational day. the every and the an the things each operations that net the plumbing matters of standpoint, the building can of say that terminals I from terminals, that the of

me. term otherwise gas that take consumes day -- low-priced something advantage of really ways low onshore Thinking to LNG for of much offshore of the is

that. of There's can I think different mayhem the lot with about in about deal it a a we ways time. all got of we've the obviously thoughts lot There's world.

In of you the in been past, very zero personally kinds and distress, in have have right? situations active there's Anytime all a lot businesses, very, there's distressed of I revenues stuff.

some come depending significant on of could how disruptions some that and So crisis persists, be significant think opportunities. this out long could I there

are we're is thinking very sheet. and We've blessed a So now every very big our And about balance as hard those flow which things at cash opportune very strong that turns to a day. generative, each debt We're time. we're out have it refinanced a deal.

So, got take we've hopefully advantage a we and can different pull lot that levers this. of of

Sean Morgan

above Hub, I on a the you charge. Henry fee said And that you the of then following of there's that fixed guess that revenue side, there's fixed portion -- or a portion variable

to that that more next you'll get Hub of of remains trend? and bond quarter reverse some the a sort revenue expect probably kind remains should of elevated we Henry benefit if So and quarters

Brannen McElmurray

The Sean. components Hub about an Henry Remember That's Henry is right. component. correct, that's of Hub customers, adder all with Henry Yeah, exactly Hub small the plus our XX%. a

correct, see as Hub see a reflected we'll well. Hub you dramatically. or going change revenue Henry see in Henry as you're over see in revenues in elevation doesn't forward that movement as But you'll So QX, expect an to and

Sean Morgan

so All right. Thanks guys much.

Brannen McElmurray

Yes.

Operator

the Nolan comes Instructions] [Operator from next from Ben Our question of you. line Stifel. Thank

is now line open. Your

Ben Nolan

potential not commit a unsure has little sheets it that? are benefit bit their are to -- especially to of low have they immediate with forward-looking balance term when as sort here, in guys. uncharted but just guess sort Yeah. of because as not has I have question I of But, oil call, or of prices the your Hi. or economic commit you seen as of want any do shaved. they am they more the guarded whether glad customers. Zoom first is too being or than I your it in my not mentality customers maybe more a Obviously, morning, the the territory is of Good or we're sort being capital not effectively actually great,

Wes Edens

Yes. answer no. short The is

it at haven't We seen all.

of is kind we is in I a think of on just the a easier days that really on much things already XX and cleaner differential, Puerto minimum. been has story Rico are hearing fuel folks is equipment. is gas one of XX of stake which And years that price is the running think net-net benefits the easier a that tells the win. I mean tremendous and I plus what maintenance the such just from the the

is savings of time the for literally millions of hundreds mean in the I XXX of megawatts frame over power dollars. this

don't XX think believe that oil or for stay people years. that going $XX at next I the prices are So $XX to

so, betting be the is reflected XX this years existed differential that that next And years. the they're in last XX to has price for going

So we don't all. see at I with issues think that any

Ben Nolan

is the any in Okay. timing least specific on its of any first or at that there over and and to developments if incremental – you the out any CapEx. along geography to we And that call of development further also Nicaragua other and And it could process? movement remaining then also, then that sort maybe update foremost well, obviously give curious shifting seems an Mexico

Wes Edens

process is complete. in Dredging Yes. Mexico nearly

a and out the this That's It's a done at water be comes in much the to spoon middle sometime taking expect the tedious June. how We end process. month that into of or it. dirt seeing of of

job. the there down doing -- guys are a very but So good

ships us catalyze bring It into the that. that to of will really the marine terminal. development the so And allows

turn something fairly think that's quickly. could So I that on

side actually, you terms bit much permitting the can't getting that's country. little little A planning, and because design and bit into a shall stage. of in more it people permitting on the delay very was too the there in this does travel down get just when people make that But pass. challenging restrictive of Nicaragua The

regions pipeline, discussions. are of the active business these a new material highlighted announce where will having and likely the in that The or we're next we geographies in sign that possible two. very, I month and MOUs actually it's I ones couple very think And

you like. So adapted again, a can't to go are there little people a calls and becoming the quickly get bit to more and into calls, Zoom because but plane video challenging

year. this of about the quite So half optimistic I'm actually second

the a oil think thing not going be I I comes other in reduced. is majors competition thing that the think is big to small from that particular, that's the

just cutting it both their own You were CapEx Exxon on crisis legacy needs. basic We're with business, serves that is of customers' without I a and yesterday, to with a by announcing $XX that everybody billion high-margin have way. is the deal to they saw projects. one fortunate their most issues think in back bunch dealing

of power next and to right and you and So to what air prosper. survive in there up water is terms need food

of the feel simply couldn't that be I prospects just in business So context the the like better. honestly of

Ben Nolan

just think Mexico the Okay. for books? – we with about And What just then Chris. how remaining maybe general what's on lastly should but in CapEx for

Brannen McElmurray

Yes.

I've in that we've the particular have analyst I the is running as mean and past. it's in you way just really the So model projected seen Mexico Nicaragua and models the pretty from accurate.

finish design and were $XXX And So still spending fit capital you to or stages. Nicaragua permitting less million through haven't the remaining than Mexico. started material

there. spend CapEx much started not you've So

Ben Nolan

Thanks.

Operator

you. Thank

Our next Citi. from question Ryan line Levine from comes of the

Your line open. is now

Ryan Levine

comment recourse if customers may don't Can morning. company contract what the with expense you your the bad Good what have pay? you're debt portfolio? and seeing And on

Brannen McElmurray

Yes.

So been I receipts. about Ryan customer it's think great. we've you're been asking –

have the was no We've than AR first quarter. at conversations charge-offs. Wes in our said been actually Days fourth the not than We million right that's They've AR had as customers. call. with in is better $X now. is in the remarkable quarter current of top less regular the it

performance have on commitment customers. really the you our So strong and of part

Ryan Levine

any portfolio contract majeure force current Fortress your is ads the provisions currently its to legal given New environment? pursuing adapt or any of then to due to And Okay. doing customers

Wes Edens

in going no been of it's majeure of our a to need how get question And is I the it people of at force concerns. fact There's mean, the they're No. their it. all. list power on of in side terms essential suggestion top

been of there's about no for no at majeure So our or part our from customers all. on talked any force

Ryan Levine

are And lows What Okay. or or transpire then you question year? me. And in the forecasting gas how you that throughout last to are April? for with progress seeing demand customer

Wes Edens

for the of million this X.X the numbers the year environment. gallons in the rest of that our kind Well we're terms reflects showing forecast current X.X million of to

in strong a going across But gas more see very little and be like still we we're bit not. power it normalized to both we demand as environment and be if the better that a year So it's significant would we that a than board well. for were feel

seven million the April last average X.X for been I mean the gallons. in think I days has

it and we to expect – So grow there. from

So it's the forward March is why material. that's beginning of The month-by-month I material. those very listed at months it

Ryan Levine

terms any of between demand seeing estimate? you types low Are customer in in delineation different

Wes Edens

say asked a not – we amount. but I'd significant are mean have less I minimal amounts contracts are but nominating their take to are minimal people that really. been Not than

– power to that they source think I to these of So the number we be efficient. a the gas most when are plants tend

the order. in So they're high dispatch

power the diminished and So right what's now. you still across have happening dispatched even gets demand efficient essentially system, that's the most if

So...

Ryan Levine

you. Thank Okay.

Wes Edens

You bet.

Operator

you. Thank

of Our Solecitto next question Marc comes the from Barclays. line from

open. Your line is now

Marc Solecitto

rate about looks on $XX volumes. morning. revised It target like by margin million same the Good was the roughly run lower

delta help us So there? just reconcile wondering if the could you

Brannen McElmurray

volume the received Marc, Yes. strict time bit customers for for run the little run rate. little reason that the Wes they're time lower The slower changing be are as and frame a QX we rate a QX the from that ramp will described because nominations shouldn't we've nominations over be for. bit seeing volumes

I the five forecasting kind numbers. is So of between range terminals of and to same but the to expect frankly, same we rate any quarter next and volumes million for for wouldn't the same. to still and seeing numbers What next are operating of one the $XX rate $XXX and summer that bit million they're now in remains all margins be difference run timing may were a little margins kind the erosion you run about a up

Marc Solecitto

think Centrica the right. XX in coming then scheduled All Okay. cargoes you XX for And from was I I delivery year, had XXXX. in there think into and XXXX

if like should you those help about cadence Just thinking forward? think year-to-date? the us about cargoes how of many taken going maybe you we how be can And have delivery curious,

Brannen McElmurray

we've four so taken deliveries. Marc, Hey, Yes.

coming is fifth expected said, Our I the up And under seven in and we're the XX. week think I in our think remaining as Jamaica. a consumption it's a it's Wes cargoes little about

some cargoes take into the is and But to that We in Puerto Jamaica. contracted cargoes be to consumed to will we through of to for XXXX for higher-priced be XXXX Rico. swap have what the going into cargoes we of continue then remainder and able those do them those opportunity the burn through have the burn and

by can spot But into basis cargoes Puerto lower as well was average I saying, leverage Rico. you your buying

in you that Puerto you Jamaica in of when cost expect the can beat the and average do I Rico LNG number. So $X.XX

Marc Solecitto

you. Got it. Thank

Operator

Thank you.

Our Tuohy line next question of Brothers. comes the from from Craig Shere

is line open. Your now

Craig Shere

Good of the already Did the equal are tenure all? the maybe couple morning. has of you this are X that cargoes a low-cost quarters just out take flush centric? is will your Jamaica first And couple of or third-party to at the in off about Bs. And to oversupply from oversupply commenced, impact oversupplied February announcement quarter because

Brannen McElmurray

Good Craig. Yes. morning,

to quarter question, to your were answer costs some related that of $X So, you in first delays. about the had million logistics

O&M some sold have of cargoes, the to you reschedule about know in QX. you running can lines add have costs. that's through as million goods had a So of total when cost we and you $X We

of remainder we none start Those look you on contracted our last that call until of into -- the yet. As the in cargoes year, XXXX. don't announced have no, commenced the

of to number. exact So the not position -- long I don't the I'm give amount want think we

and is for buy Jamaica extent to like what still have volumes in Puerto a I those have that we'll in you'd Rico. the in in think And you're volumes Jamaica the Rico. discussing to And to you excess those Puerto of that's try ballpark. swap ton use just I ability said,

Craig Shere

plans? cruise you impacting with your And this see challenges systemic the do Great. potential for industry, the line regional bunkering

Wes Edens

that small So, or I operate big potential to cruise fleet continue for cruise ships dwarfs worldwide the ships, in container the do the the Miami. customer ships. Caribbean. They're are business a obviously in think ships operate the markets a shipping do right? that customer. cruise the in the The be We think relatively prospects which They

So backyard they are our literally. in

hard by we no again ships long be is cruise will were once hit as as for cruise that revenues and obviously more they recover a obviously that it. stuff their resume. they And And that right? and X because worldwide for good just the ours don't I devastating that much so, customer pretty cruise But be ships so term us industries sake the quickly they I -- and particular for industry good is ship good no think a a hope think a candidates the So impacted bunkering of were the them. become in was for they blow market. bigger in potential will few container candidate a really And

Craig Shere

implications I this business? global was, lockdown your previously having hydrogen-focused question envisioned got or do shift NFE any coronavirus you. last you global systemic to And and economy scare see and negative positive for a

Wes Edens

takes I it's think -- it a question. good really

getting industries it worried think two, their right? a focus moments focus are and world. big survival; on and that that people. for takes times think it number a that in page think hydrogen I long like the about, for So, defining their And businesses of I the corrected. I for they're us do think this the people remains prosper, for first, I that lot people off front there's term

the fuel of make which be it It that would If I has long in front now. difficult of able -- locally terms impact that the your think transport moving you and takes to of stuff times. But lot around production stem people's any of page you're the during term. might that it probably a issues perspective off just have actually right don't of a could lot

So...

Craig Shere

you. Thank Great.

Operator

you. Thank

the question of comes next from JMP line from Joseph Our Osha Securities.

open. now Your line is

Joseph Osha

the your I'm little the about and you to you've on intermediate-term press bit gentlemen. if be potential detail? we some there questions. And that. step for a of of again might when seem thing you. wanted more I Wes, producing kind one Thank from update about wondering away and talked plans Hello I is some more more any seeing to have see hydrogen.

Wes Edens

power. where we that of hydrogen using goal year project our and in the specific have one by are the this production one to of the pilot No a year Yes. of markets, end is the producing we have in

up can a of before, its power lot could said modern of the I XX% As to equipment be take hydrogen. fuel

I in you that think proof-of-concept part introduce focused incredibly it modest in part It's But we're in we've of in But capital have sector particular important. don't got this So one use. project to a the particular on. to total. is

big before, decarbonizing people part hundreds we a applaud calls, our people, a -- the because want a the little got in some from with world follow-ups in last I said gotten is to We've lot different -- but as literally that there's others, and that. there's support of of of. And we different inventive tent a than lot we call be e-mails, interest more and what

a to So are it. we have concept people and us participants And meaningful in come to a of very we introduce lot. lot had of serious have want them the a very number and

the think the cost hydrogen right? same $X $XX the diesel MMBtu at as is whatever is gas. a cheaper gas. MMBtu-equivalent than going of has to will relative day, position Diesel the today. of be I the drive competitive bit effectively been where its historically. that its straight little an which price is to adoption, hydrogen hydrogen And set $X end That it's pretty So, that is $X

I markers So, are think two meaningful. the those are that

So, price I of to it by and guess the equivalent X.X multiply that's times the the $X so is you is $X hydrogen MMBtu, dollar take $X.XX, $XX.

in power. I hydrogen, big lot to chance So, production a get if think $X the of gas have can you displacing of you a of

$X there's cases relatively a either we'll to here. hopefully chance the can we quarter and you displacing a part after people the different think or of proof-of-concept a in of quarter about have to meaningful And both we're in report get get of hydrogen be the want diesel. something really the which many big things If And near-term. next talking those to number short you in of has to it term, big,

Joseph Osha

the And as well? an we're an that. menu business interesting seeing a that one. some just vehicles potentially market small Is the cell they're The on are market, but Thanks. as fuel Okay. follow-up interesting transportation in of that quick on particular a

Wes Edens

Yeah.

it to return gas of the at look somebody changeover to do I a used, refueled are garbage well a every lot hydrogen gas the trucks, that in could to would again application trucks the get supply so for of in or place, Those country easiest the to same likely to and likely examples the that run natural you trucks, very people the a bus as industries the natural the on same same the forklift is operator of looked where a profile over of of transportation Those ones UPS are Those gas logistics that in think percentage base systems that high back people back use municipal example, night. the you're as come go or the easiest as place all so-called users, country now. think natural many are when the I uses to be that's warehouses. chain start. most over the for return-to-base they equipment to, in to and so right FedEx

logistics talking more start supplying you trucking, airplanes, the long-haul When shipping, change obviously complex. about automobiles, long-haul become long-haul long-haul

bit things COVID and short-term I up -- with for in focus the shall folks. just will But for and And on pass. disruptions I us it of but do. promising that's some end all the once become this whatnot. news that the not with too again where think mainstream a think once to users a there's does first but lots Again little return pilot. the it our base mayhem we'll gets lost think And So to likely I

Joseph Osha

Thank you.

Operator

back further like call closing Andreini Thank Alan questions. this to showing for I no turn you. to the would over remarks. time, At I'm

Wes Edens

I'd one metrics, didn't Actually close kind like talk it's to to don't it before valuation you a Alan not we give -- about is because we because to say of thing there it something meaningful. a are going not we But issue that a I focus of issue. couple day be there's I on long-term short-term done have it's think every things because that a to

all converting the one, simplifies it the We statements the our thing one interest we in our partnership structure. see to shares. because you'll hold direct interest in are do that that is that Number company capital financial just of we

kid a an can step and and that I that understand accounting read want statements accounting this is high consider As -- a towards adept a statements school not don't myself I big is financial that and person statement goal. reader,

that material the to others going that converted. holders is all So interest hold and the I be are

So it XXX about what is. A June they will Class increase There's what on the the as total up be ordinary -- shares. shares share course will about In show to regular it's count X. million all -- or

of converts a long shares. I so, we're shares anticipated for that's us do and investors allowed in with not there and we've percentage that. This are doing invest insignificant thing it's not does the myself been Class not right outstanding It only liquidity what tax that any It's but the pre-stage that to -- vocal for to actually A the sales are because So event think some have everybody. us they're term in others done. the or for that for

So filings position XX or there's own new respect no to reflecting anything but Number would the else change you'll our what with be, to see that that. one.

and sites beyond in the working we're that achieve expect some fairy you at the assuming charts year gun actually of million look the back $XXX very the here not million is second have success something that, page and on in Number there, to two, that. are we three half volume tale it's gallons, hard in five, that is far much and the but when a very I frankly that this and margins number margin

of $XXX million you about SG&A cost margin The the charges. the it's when and $XXX out in finance million the subtract

our company. and people cost and shipping gas is there's the As of There's there cost finance the the four the of only the buckets charges. there's Chris said there is SG&A in

there my Taken in in -- collectively things across to view board. significant upside is the those reductions come four cost having

be we of how opportunity board bring the the we're to and bottom money look efficient is do the One of like things that we hard on make during the have has I line. and across the that to what you work can a more And company this on I lot internal us given time think focused the while this at and see company. our if a of workings day the benefits of to focus lot doing every that more of to we more coming

$XXX than much $XXX $XXX we translate earnings higher or it it So in trade right valuation we if million million result would much, to already in pre-tax is where the now. million a which

it I standpoint undervalued. a to very numbers. the pitch stock these And that after I'm like the quarter roll the not next I'd valuation the And my think the But numbers so while see quarter today will through from reflect market of that's is when focused that. I very, price you on just think think about or how

So, thanks with Alan? that, very much.

Alan Andreini

We time. today's Thank in especially you updating Stay call QX. safe. look for all forward these after participating in you in trying to

Operator

this Thank call. participating. you gentlemen, for today's conference and Ladies concludes

You now may disconnect.

New Fortress Energy (NFE) 9 May 202020 Q1 Earnings call transcript