New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Q3 2020 Earnings Presentation
37 slides from New Fortress Energy's earnings presentation, October 2020
Slide 1: Q3 2020 Investor Presentation
October 2020 Q3 2020 Investor Presentation
Slide 2: Delivering Positive Energy Worldwide
Delivering Positive Energy Worldwide Our Vision We want to light the world. Billions of people around the planet lack access to affordable power. Electricity should not be a luxury good. Our Mission Our mission is to provide capital, expertise and vision to address this problem while also making pos
Slide 3: Agenda
1. Executive Summary 2. Development Update 3. New Business Update 4. Hydrogen Update 5. COVID-19 Update 6. Financial Performance 7. Appendix 3
Slide 4: We're Successfully Executing on our Priorities from Last Quarter
Executive Summary We’re Successfully Executing on our Priorities from Last Quarter We’ve achieved several major milestones in Q3 # 1 # 2 # 3 # 4 # 5 Production Development New Business Hydrogen Finance & Operations Achieved record New terminals Signed new contracts Reliably serving Announced 2 volum
Slide 5: Reaching Record Volumes: A Tale of Months
Executive Summary # 1 Reaching Record Volumes: A Tale of 3 Months(5) July August September San Juan Units 5 and Jamalco boilers Operational facilities at 6 hit Run-Rate(6) Online(7) full Run-Rate burning Volumes lower cost LNG 1.4mm gpd 1.5mm gpd 1.8mm gpd We reached an intraday peak of 2.0mm gpd in
Slide 6: Record Volumes: Daily Breakdown
Executive Summary # 1 Record Volumes: Daily Breakdown Operational projects achieved Run-Rate volume performance A B C D E Total gpd gpd gpd gpd gpd gpd Jul-1 129,335 326,090 281,510 399,702 78,867 1,215,503 Jul-2 122,646 292,025 279,857 435,833 87,450 1,217,812 Jul-3 126,864 325,161 277,760 435,643
Slide 7: Development Update
1. Executive Summary 2. Development Update 3. New Business Update 4. Hydrogen Update 5. COVID-19 Update 6. Financial Performance 7. Appendix 7
Slide 8: We Develop Critical Energy Infrastructure
Development Update We Develop Critical Energy Infrastructure In just 5 years, NFE has successfully built a world class portfolio of operational assets with a robust pipeline of projects We are focused on building: • large-scale terminals & power plants • direct customer solutions Montego Bay, Jamaic
Slide 9: Large-Scale Terminals & Power Plants
Development Update Large-Scale Terminals & Power Plants We have completed significant milestones at our two large-scale terminals currently under construction La Paz, Mexico Terminal Nicaragua Terminal 135 MW Power Plant 300 MW Power Plant Rendering Rendering Terminal Online(10): Dec. 2020 Project O
Slide 10: Organic Growth: New Customers Under Development
Development Update Organic Growth: 9 New Customers Under Development 3 new customers expected to be operational by year end, with the remaining operational by Q1 ‘21 Providing dynamic solutions to our customers • Customers typically require gas and power • We can easily leverage existing terminals t
Slide 11: Logistics Update: Proprietary ISO Flex System Nearing Deployment
Development Update Logistics Update: Proprietary ISO Flex System Nearing Deployment(12) We are ready to deploy ISO Flex in Mexico & Nicaragua Hired former COO of a publicly traded Offshore Service Vessel (OSV) services company Opened ISO Flex-dedicated Louisiana office Purchased OSV Identified 2 ded
Slide 12: ISO Flex: Delivery in 3-6 Months vs. 24 Months
Development Update ISO Flex: Delivery in 3-6 Months vs. 24 Months Our latest infrastructure solution can dramatically reduce project timelines and costs by 50%+ (13) Our Proprietary ISO Flex System ISO containers • Big ship directly to ISO storage containers on small offshore support vessels Big Shi
Slide 13: New Business Update
1. Executive Summary 2. Development Update 3. New Business Update 4. Hydrogen Update 5. COVID-19 Update 6. Financial Performance 7. Appendix 13
Slide 14: Our Growth is a Combination of Organic Growth & New Terminals
New Business Update Our Growth is a Combination of Organic Growth & New Terminals Growth Organic growth from New terminals our existing terminals 14
Slide 15: Opportunity for Rapid Organic Growth Through Committed Terminals
New Business Update Opportunity for Rapid Organic Growth Through Committed Terminals 1– We are focused on driving utilization to capitalize on significant operating leverage 2– We will utilize existing infrastructure, logistics, & personnel 3– Minimal capital required to bolt on new customers Total
Slide 16: Our Near-Term Pipeline Is Robust With Over 3 GW of Power
New Business Update Our Near-Term Pipeline Is Robust With Over 3 GW of Power We have 8 opportunities actionable in the near term representing over 7mm gpd(22) Projects under development in 8 new markets Key characteristics of 600 new markets: MW Large populations 550 South Asia Significant existing
Slide 17: Hydrogen Update
1. Executive Summary 2. Development Update 3. New Business Update 4. Hydrogen Update 5. COVID-19 Update 6. Financial Performance 7. Appendix 17
Slide 18: Our Goal is Affordable Zero-Emissions Hydrogen
Hydrogen Update : Our Goal is Affordable Zero-Emissions Hydrogen We want to find the cheapest zero-emissions hydrogen possible so we can displace fossil fuels and reach net zero emissions How big is the market? Where does it come from? Market for H2 is larger than market for LNG 2% electrolysis/othe
Slide 19: Hydrogen Comes From 3 Basic Feedstocks
Hydrogen Update Hydrogen Comes From 3 Basic Feedstocks We want to identify a hydrogen production technology that eliminates, captures or reuses all carbon created through the production process Water Gas Coal Cost of feedstock $0 $3/MMBtu $12/ton Production Electrolysis Methane pyrolysis Coal pyroly
Slide 20: 3 Major Sectors Contribute To 80%+ Of Current CO2 Emissions
Hydrogen Update 3 Major Sectors Contribute To 80%+ Of Current CO2 Emissions “Best case,” electrolysis alone is not cost-competitive Fuel Costs Across 3 Major Sectors Contributing to CO 2 Emissions(30) Hydrogen Power Industrial Transportation Transportation, industrial, and power sectors $ /kg H 2 1.
Slide 21: Reaching Zero Emissions Is More Important Than The Source
Hydrogen Update Reaching Zero Emissions Is More Important Than The Source Climate change is wreaking havoc across the globe. It is critical that we reach zero emissions. 1st 2nd The Goal: The Source: • Electrolysis is “clean” if power comes from a renewable source • Green, blue, grey categorizations
Slide 22: Update on Our Mission to Zero: Green Hydrogen Projects
Hydrogen Update Update on Our Mission to The countdown to zero emissions begins with our newest green hydrogen projects(31) 1 Long Ridge 2 H2Pro • E-TAC uses renewable energy to split water into H2 and O2 in • 485 MW combined-cycle power plant to run on carbon-free two phases hydrogen • 95% efficien
Slide 23: COVID-19 Update
1. Executive Summary 2. Development Update 3. New Business Update 4. Hydrogen Update 5. COVID-19 Update 6. Financial Performance 7. Appendix 23
Slide 24: Response to COVID-19: Dedicated to Providing Essential Services, Safely
COVID-19 Update Response to COVID-19: Dedicated to Providing Essential Services, Safely Our comprehensive COVID-19 protocols and testing regimen have allowed us to keep our employees safe while continuing to complete major projects The situation Our results: March 1 March 7 March 11 March 22 May Jun
Slide 25: Financial Performance
1. Executive Summary 2. Development Update 3. New Business Update 4. Hydrogen Update 5. COVID-19 Update 6. Financial Performance 7. Appendix 25
Slide 26: Financial Performance
Financial Performance Financial Performance Operating Results Financial Metrics Volumes: Increased 557k gpd to average 1,535k gpd, Q2 2020 Q3 2020 QoQ primarily due to volumes delivered in PR Change Revenue: Increase of $42mm due to higher volumes Volumes Sold, Average (gpd) 0.9mm 1.5mm 0.6 in PR, t
Slide 27: Illustrative Operating Margin Goal from Committed Volumes
Financial Performance Illustrative Operating Margin Goal from Committed Volumes (20) As Committed Volumes become Operational, revenue & Illustrative Operating Margin are expected to increase substantially Illustrative Annualized Operating Margin Goal $700 $600 $500 $428 $434 $433 $400 $314 $317 $300
Slide 28: Q2 Capital Plan Achieved
Financial Performance Q2 Capital Plan Achieved Capital plan fully funds Committed projects, provides additional liquidity for pipeline projects and returns capital to shareholders Goal is to maintain modest leverage, strong liquidity and disciplined capital Received B1/B+ Issued 5-year Paid $0.10 al
Slide 29: Appendix
1. Executive Summary 2. Development Update 3. New Business Update 4. Hydrogen Update 5. COVID-19 Update 6. Financial Performance 7. Appendix 29
Slide 30: Operating Margin Reconciliation
Appendix Operating Margin Reconciliation (in thousands) Q3-19 Q2-20 Q3-20 Net income/(loss) $ (54,424) $ (166,519) $ (36,670) Add: Contract termination charges and loss on mitigation sale - 123,906 - Selling, general and administrative 40,913 31,846 30,849 Depreciation and amortization 1,930 7,620 9
Slide 31: Operational Asset Performance
Appendix Operational Asset Performance Achieved “three zeros” for HSE incidents for operating assets(35) Health, Safety, & Zero (0) Lost Time Injuries Environment (“HSE”) 0 Zero (0) Recordable Health and Safety Incidents Zero (0) Spills, Uncontrolled Releases, or Loss of Containment Events 99%
Slide 32: Disclaimers
Disclaimers – IN GENERAL. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the “Presentation.” – FORWARD-LOOKING STATEMENTS. Certain statements reg
Slide 33: Endnotes
Endnotes Certain of the below Endnotes include forward-looking statements. Please see our note regarding “Forward-Looking Statements” on the slide titled “Disclaimers” of this Investor Presentation (the “Presentation”). Please evaluate this Presentation in connection with the risk factors in our pub
Slide 34: Endnotes
Endnotes – (9) “Under Construction” means “In Construction”, “Under Construction”, Development”, “In Development” or similar statuses means that we have taken steps and invested money to develop a facility, including procuring land rights and entitlements, negotiating or signing construction contrac
Slide 35: Endnotes
Endnotes – (17) “Committed Volume”, “Committed Portfolio” or references to Commitments means our expected volumes to be sold to customers under binding contracts as of the period specified in the Presentation. Some, but not all, of our contracts contain minimum volume commitments, and our expected v
Slide 36: Endnotes
Endnotes – (21) The calculation on this slide is based on 8.2mm GPD multiplied by our Illustrative Operating Margin of $0.40 per LNG gallon, multiplied by 365 days per year. This calculation is an illustration and should not be relied upon for any reason. – (22) “pipeline” “opportunities” or “In Dis
Slide 37: Endnotes
Endnotes – (31) Our investments and pilot projects are inherently subject to risks of cost overruns and delay. Because these technologies are innovative, we are making investments in unproven business strategies and technologies with which we have limited or no prior development or operating experie