Earnings call transcript Q2 2023

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Operator

Good morning, ladies and gentlemen and welcome to the Excelerate Energy Second Quarter 2023 Earnings Conference Call. My name is Grant and I'll be the operator for today's call. After today’s presentation there will be a question and answer session. [Operator Instructions]

I would now like to turn the conference over to our host, Craig Hicks, Vice President of Investor Relations and ESG. ahead. go Please

Craig Hicks

Dana Thank is XXXX everyone. today joining Energy's and joining Officer. Officer Excelerate Steven Chief Commercial President Good Officer. Chief Bustos, Financial results you Executive call. quarter Also and Executive Chief financial President call call Executive Participating second Vice Kobos, and today morning, the and for Armstrong, Daniel on are President the Vice

our can website and release ir.excelerateenergy.com. Our that second on risks be were of yesterday to found afternoon results this and number on we making like quarter would presentation and that will at released I press call everyone forward-looking a uncertainties. XXXX remind involve be statements

obligation results those them. materially from revise may forward-looking expressed actual statements, differ update make to or these Our no in and we

also non-GAAP remarks financial refer Today's certain measures. to will

the provided the at of financial have reconciliation We a directly comparable GAAP measures most the presentation. back to

call Executive With turn like Steven the now Energy. to Excelerate Chief that, to of over Kobos, I'd Officer

Steven Kobos

thank you financial performance us call. outlook will our on Craig, XXXX today touch Today the my Thanks, quarter conference global quarter second all for the and during and earnings of and strategic our remarks call for for the a I'll joining of market our more the remainder who the over then our review pass will Dana, financial results LNG objectives. to provide for on 'XX detail quarter. for

at $XX net financial the adjusted and in second coming strong million results in reported close with million. Excelerate to quarter income $XX EBITDA

the and Services that see FSRU we underpinned Terminal Our margins financial from results stable revenues by predictable and were business. our

investment underscores Energy of LNG periods during Excelerate the opportunity. earnings an of attractiveness market Our consistent as the and performance volatility,

highlights. several financial also have to results, delivering other strong In addition we notable

These secured earlier in sales additional to LNG Bangladesh. for this through in LNG contracts are Year-to-date, we QX, the have we spot had in Finland tenders activities we cargoes the Bangladesh of in sale gas run cargoes spot addition by Petrobangla. four During the year. secured sales

revenue that Our price opportunistic the potential of upside stability sales and taking us LNG secure business. to gas while compliments limited base ability with risk provides our

the Argentina, gas at In port Excelsior FSRU regasification Behi the Blanca terminal. services providing

Following quarter will Excelsior the the 'XX. the of the return Germany charter third in Argentine winter, to

demonstrate quarter. to excellence proud a like severe it the commitment FSRU was continued and successfully from event global to Bangladesh. Excelerate Behi navigating be team team. operational technical more Mocha during its Blanca, expertise Cyclone the I cannot Whether Our Excelsior in Europe to the or weather of repositioning

of XXth, additional FSRU To of June provide the global XX% on some sendout represented our of capacity fleet context as operations, for our scale terminals. based

August Xrd, on record the dividend declared Finally, XXrd. of as Directors of August shareholders per $X.XXX of Excelerate’s share to another Board

the natural ending EU full. November of the in three target quarter This for mandated levels XX% storage is approximately With in XX% EU Xst. advance the mild turn on and that, LNG of market. to contributed update inventories Europe let's global capacity half weather first of XX% full. EU storage gas Currently, 'XX, roughly a the reach of by storage the buildup continued to In brief to months is

capacity billion with of improving In XX IA, cubic to more increase China's gas countries billion XX coming a in million the need muted through contributed in over market an the the allowed APAC second range due market could According winter imports tons was and natural cold should to year's on of the continue reenter the Asia-Pacific consumption for liquid Japan meters, LNG colder LNG market. last a in XX region, winter regions. to in by of compared The or winter. quarter, LNG meters the Asia, which heating winter. in and South fluctuate countries This million regasification return a season. or to LNG and to focused drive cubic about nuclear there LNG supply. X.X Asian the are Europe spot tons the EU In European healthy incremental the demand to could potential Korea uncertainty availability flexible

On LNG tight and global capacity should to approximately remain markets in when to incremental after of XXX tons supply front, come expected the the supply The million annum are per XXXX, improve balance near-term. begins demand online. LNG

liquefaction that is portfolio. primarily Excelerate for new to are in dynamic sources customers, market the opportunities potential Gulf significant of This for Global interest downstream ideal fit they U.S. represent to particular an of connect LNG destination our Excelerate free expected Coast LNG volumes create projects to are South. as to FOB

integrated we pursue value we investing to in strategically on focused While are LNG downstream chain. near-term, continue opportunities, the in the

LNG portfolio of fleet gas This grow diversified and an establishing our includes and platform. evaluating our marketing supply, opportunities to developing LNG

XX-year and addition In sales we're Global, considering to also earlier with the agreement Venture other we announced with this LNG LNG purchase producers. SPAs year additional

having to cost-effective supply diversified us of new a allow As and LNG more to to existing plan business, the flexible offer we portfolio will both execute customers. our and products scale

our welcoming integrated is build in forward growth at is fully opportunities evaluating with looking supply we a to conventional the our contributing Last to team. announced maintain Industries. fleet a to and acquire business. to FSRUs flexibility. top FSRU needed to strong position also utilized XXXX, Heavy today drive our That's our support to we FSRU fleet. for and FSRUs Excelerate priority will Excelerate and state-of-the-art We're delivered are be carriers call, existing June in the new This we our volumes, LNG offerings. with for The new remains additional managing and look Hyundai infrastructure

We this gas sales strategic taking with with our plan partnerships of LNG increase LNG longer-term we're a strategic some to deliberate the incremental bridge opportunistic presence with marching driving actions supply. margin of growth to a agreements pursuing marketing FSRUs, to goals regard are the LNG approach combination creating a of and downstream by achieve producers. of our Finally, we to taking and

to our building rates putting in deploy attractive our at return. these develop of infrastructure strategy integrated LNG summary, In important of will blocks and place, ability enhance

let's a brief update. Now Bangladesh to turn for

negotiations We for continue our for broad to the advance We've details the for Payra, of framework project parameters which Petrobangla. sheet deal. with completed government with LNG term Bangladesh our commercial the Pirate in a and SPA

As sheet going in Bangladesh Government the term with through final is within typical is of its approvals round the government. system, of approval ministries the various

sales, completed portfolio government SPA for the a our will role We've with short-term final also continue which important SPA market. awaiting negotiations spot are in will the proposed approval. complete, to complement and play this Once an of LNG LNG

you who I'll now call walk will through financial of details turn over Dana, our to the results. the

Dana Armstrong

everyone. Thanks, Stephen, and good morning,

for second this of the quarter pleased year. are performance We Excelerate’s with

quarter which up $X an to income XX% million, $XX net second adjusted increase second was year compared Our of quarter. as is prior million the or

this first quarter slightly year, income our adjusted the lower. As net was compared to of

compared quarter up second was second as $X primarily $XX adjusted million charter adjusted the quarter Argentina. year year. income adjusted higher the driven million, of Blanca prior and in of in XX% B over quarter, Finland by rates net Our up increases were this The and EBITDA EBITDA first million $XX or to and for up year-over-year for

EBITDA by contract Sequoia. quarter in driven rate resulting from for the and and a along dry our expense operating The of extension in purchase dock LNG its Sequoia FSRU higher UAE a adjusted with with the of of full operations was the in lease the lease Excelsior, sequential spot Along and at quarterly lower expense operating the FSRU the XXXX, into first cells lower the cargo for following completion scheduled Bangladesh. two quarter of increase

to are stable most Excelerate of committed vessels benefits of our Today, from contracts. having long-term long-term a portfolio contracts.

flows As of June terminal our $X.X average the X contracted of weighted years. FSRU cash have assets of XX, life with remaining and roughly remaining billion

We from portfolio. customer benefit the our of also geographic diversity

from the and East. presence Middle global the Our Europe, a of includes mix Americas Asia-Pacific, revenue

in of us FSRUs that and diversify and further Finland economies. counterparty our security pinch geostrategic pivot allowed regions, credit our year, to and these to each support our and In allowed Germany us geographically strengthen service Last profile. terminal to energy simultaneously local enhance points Europe

streams predictable bolster generates to growth capital. business base enhance returns our will on free healthy cash flexibility flow pursue our opportunities that that Our and

sheet. and to liquidity our turn Now balance let's

As under million revolver. and $XX Excelerate equivalents hand, letters issued of had cash credit of $XXX our of million of and borrowings outstanding June XX, cash on no

X.X our that growth strategy our of compared the as second Our of quarter. continue the to times accretive to of quarter was strategy we best align strong times end balance our opportunities With in sheet, the gross monitor execute at capital for the ratio and we shareholders. first X.X leverage the to interest sufficient have market our

projects positioned to well is and to execute will ability Excelerate develop consistent returns. footprint, generate further global stable, our that diverse a With

an share strategy I'll outlook. our capital and allocation our financial on Next, update

opportunities. on focus capital preserving Our future now to remains growth invest for in

to approach our We capital investments. are disciplined maintaining prudent and

evaluate million to the value and upgrades We $XXX the returning Total to of strategic quarter in our our strategy context for vessel and million CapEx shareholders, for the purchase continue of the $X capital objectives. vessel which million, we'll dividend to related included of various roughly $XXX related equipment. maintenance and CapEx also was Sequoia recognize

dry reminder, not be year. structure, the in the is planned scheduled expenses as income for boot will the CapEx. As of be related excellence dock the maintenance dock transfer build, classified Because for costs entering statement. quarter the activities a the is will on recognized this FSRU fourth the excellence operate Instead, dry of vessel

fourth quarter full included the guidance. year on is the To our of financial our clear, be effect dry dock EBITDA in results

narrowing million. are financial guidance and is between adjusted $XX Based XXXX. million. between on and EBITDA CapEx date, $XX Maintenance results expected we now $XXX for our our range expect million $XXX to our range to We million to now

call This concludes the for our open remarks. that, up Q&A. we'll With

Operator

our open. you Chris We from have now line question from [Operator Bank. Instructions] is Deutsche first comes Chris, Robertson

Chris Robertson

in Steven, starting delivery the was addressed has article building a seem LNG XXXX prepared of for for does X years time the there I the XX the to during Excelerate MTPA Bangladesh, align proposal this to government news but think line citing vessels. already approved supply remarks, that to out which with probably for new the X.X yesterday of you in the

that could So I article. if address you wondering was just

Steven Kobos

and up that what was Yes. on the Bangladesh our thanks that. on ground for out team Thanks, consistent We saw us. with and too the telling of Chris, picking market, it's

IPO, happens. were because X.X the years mean we existing when less were we make and pleased. We going this existing substantial. and what grow than out we're So to Obviously, is that through want do. this going from I'm But it no put Payra it's we molecules when and from scale of and way mistake, it, mentioned and and we're signed in working we're -- the pleased we'll system, point. to through deal bureaucratic that we release you the deal it the about were us, something, that the press the their Bangladesh that both time last hear you'll press read reached deal, markets first supply to doing infrastructure with supply We're everybody pleased told the

X.X XXXX. projects SPAs of of If providing in we to going tons offtake million. deal LNG from you annum operational to million U.S. would to be SBAs were number greater both in already And then actively top X.X companies and LNG LNG put companies to the in offtake still U.S. equal per buying terms projects SPA that $XX operational future, size, we much the count expected or this if than of were signing going signed XX MTPA the than SPAs is in less be

So the in flexible our achieve that with Excelerate you infrastructure. what can markets of tells just scale these

back executed on when I'm have at the of of So picked but glad Daniel's We're the be team up hard proud work time, same we definitives. actually it. we'll you

Chris Robertson

Dana, this quick is very a question.

your excellent long the yard, get that, sticking time to up clarify the could et line comments many maybe the time how you just around how on XQ sale to days, during cetera? Following around

Dana Armstrong

Yes, sure.

in I going yard drydock. the it's believe So excellent Southeast to the Asia.

it's hire So stated And not we'll amount days. our bot, huge P&L. take drydock in time, be we're but on XX of to as comments, expenses drive because the through for off those about it's a a going I

Chris Robertson

some carriers Can could was guess are explain bit last looking carriers. charter you potential clarify, charters, in I are looking to here I wondering for long-term into on you the mentioned X. acquire LNG you looking on you question to support portfolio vessels Steven, at me. more? you if Slide LNG supply a

Steven Kobos

mean, depend of use I procure arrange that FOB still actively at both and alternatives. we refining Bangladesh whether Chris, some where we we a our DS we're to lot we're supply strategy -- for this considering is our going our volumes, But of upon or how portfolio. point, it

Operator

JPMorgan. from Our next is question line comes Tonet Jeremy open. from Jeremy, your

Jeremy Tonet

on Could Payra to guide more wanted rails potential wondering you Just on with more how of on core touching here versus to returns business there. us a such details you about or you give follow think a -- project. FID to get to how compete think about as here up such Just And potential alluding the returns, about you're returns aspects how want well think terminals FSRUs? the as would that. on other you basis just color

Steven Kobos

points on that pleased referring are touched Payra couple both because the executed. SPA, sheet the a to You for also itself is the of being was we and announcement term

know going Now But going the is I'm over scope component on returns to and is the refined, Dana ultimate this which to Payra itself, to that. both of to still infrastructure Bustos, in to being turn infrastructure impact we Chief shifting what scope on our here we've terms we I Daniel are conveyed a the clearly date, Commercial don't Officer, how do of component. but guiding. have

to or communicate at help the can at out what on all thinking this it how want point point. at market we about we're Jeremy you to this least of one if So

Daniel Bustos

you have Great to here.

X on We the at projects. see have view the been Payra, the keep a the integrated Payra, to returns And can we're keep together on consistent returns so see integrated We news that today. times We when We infrastructure to announced about SPA is by growing do EBITDA the and IPO. the on put on what still project we building example, was multiples FSRU. we good integrating Our going increased in market. we more that the you're higher X to contracts that is believe way opportunities. times from supply returns a talking

whole of the rather as a a one a project being with to good example. contract. our see returns business FSRU So is and Summit. integrated single a terminal. second my is recommendation than We started Bangladesh We terms in added with the

going and to Now Payra. we're supply adding Payra we're developing supply, we're going to start to

see So that times EBITDA you you where times we're to the expecting. X when integration, multiples see that's the X

Jeremy Tonet

to looking up the of downstream. wondering times. much would a point holistically, just into be of on project economics the integrating And at you market the the times power I X maybe there. you're describe But following it, just bit as And that little know X on predicated how kind

Just curious market. there's certainty downstream much quite on further a as the core versus where not input to markets part the maybe

Daniel Bustos

We considering moment. the added projects value this at power not of are

on all the So LNG we that the metrics FSRU and of are integration infrastructure. commenting and supply,

Operator

open. We have from is next Blum comes our Michael Fargo. question line Wells now from Michael, your

Michael Blum

in spot supply just quite do on you lately TTF a capitalize on ability desire Wanted much And to terms your to to been prices your of have up wider spreads? potentially ask Can you what's bit how pursue some disruptions. opportunities? remind us additional ability have and

Steven Kobos

reminder they're reliable Yes, thanks Michael, I how joining if and those returns mean been what just anything, to speak this a this people as morning for our exposure. on heard commodity haven't just with tied spot play to journey are, stable I us. hope for us, our who is base how opportunistic. we being not

on set walk with you it it. in just what on quite to with room while going a we that upside we've can about. that when may sitting So to consistent earner not a try predictable -- much leaves We how that ceiling floating but long we we're can just enough get, there talked be means being cargo that still going work to

So philosophy answer think best our is point. culture your to that I just the speak our on to and question to way

Michael Blum

of terms numbers. the want just understand to full I make I in then sure And year

strong. QX So pretty

above of half the sort you're First tracking year guidance. of XX% year, of full your

didn't So the consider second factors guidance the reason to dry half for there in main the of you? is year? Or are some planned the dock you raise other

Steven Kobos

pretty I well that because I'll touched the. in handle on Michael, Yes, this. thought she let Dana

Dana Armstrong

Michael. correct, That's Yes.

cargoes we QX. had X X in saw So you we another in -- we'll have cargoes our release have and that obviously,

but performance. have of dock. we about we'll So because We're bit QX a not is guiding of little on confident feel our quarters, QX the just then where dry softness

not So those impact because because but capitalize will off-hire -- expense then impact, be to there'll it of an an be the we're excellence be also there'll impact, able costs.

impact where our we previously and quarter, relatively. the that's that fourth ranges married, why same the see we're but You'll keeping guidance in in hadn't

Operator

on line. further no [Operator questions the Instructions] We have

Steven Kobos

thank today's Thank again All Well, us who operator. right. to joined on call. everyone you, you

questions, If Relations. to Investor out VP to you any feel our Thank please free of reach much. you all have Hicks, very Craig

Operator

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

You Have now great may day. lines. a disconnect your

Excelerate Energy (EE) 10 Aug 232023 Q2 Earnings call transcript