New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Q1 2024 Earnings Presentation
40 slides from New Fortress Energy's earnings presentation, May 2024
Slide 1: Q1 2024
May 2024 Q1 2024 NewFortress energy
Slide 2: Agenda
. Executive Summary . Customers & Terminals Update . FLNG Update . Financial Results . Appendix
Slide 3: Executive Summary: Quarterly financial results
Executive Summary Quarterly financial results Illustrative Goal?) $mm Q1.24 FY'24 Q1-23, Q2-23 Q3-23 4-23 Liisa $690 ~$3.8bn9) | $601 $561 $514 $758 Profit from Cargo Sales - ~$5(4) | $251 $191 - $1 Adj. EBITDA(S) $340 ~$2.0bn+(9) | $440 $246 $208 $388 Neuncome (rsibutsblero $54 ~$1.0bn(8) | $150 $1
Slide 4: Executive Summary: Operational highlights
Puerto Rico Fast LNG fi fi fi Executive Summary Operational highlights Sold NFE Fast Power plants (San Juan & Palo Seco) to the Puerto Rico government on March 16, 2024 Awarded 80 TBtu island-wide fuel contract Total fuel contracts of 105 TBtu(™ (25 TBtu for San Juan 5/6 + new 80 TBtu contract) Both
Slide 5: Agenda
. Executive Summary . Customers & Terminals Update . FLNG Update . Financial Results . Appendix
Slide 6: Puerto Rico
Customers & Terminals Update Puerto Rico
Slide 7: We have a large & growing energy presence in Puerto Rico
Customers & Terminals Update We have a large & growing energy presence in Puerto Rico fot ee !cenerarr Logistics Gas contracts Genera asset management"’) San Juan Terminal 25 TBtu San Juan 12 power plants 5 ships 80 TBtu island-wide 800 personnel 12 trucks 90 ISOs Puerto Rico operations @ \FF facili
Slide 8: The majority of power in Puerto Rico still runs on diesel & fuel oil
Customers & Terminals Update The majority of power in Puerto Rico still runs on diesel & fuel oil Our goal is to transform the grid to a mix of renewable & natural gas power; 80 TBtu island-wide gas contract is first step Location MW output Gasnow San Juan / Palo Seco Fast Power 425 MW. San Juan 5 &
Slide 9: Reliability
Customers & Terminals Update reliability supplied gas of Puerto Rico's energy needs
Slide 10: Brazil
Customers & Terminals Update Brazil 10
Slide 11: Barcarena: The Amazon's sole entry point for natural gas
Customers & Terminals Update Barcarena: The Amazon's sole entry point for natural gas Barcarena / ned COD: Q1 2024('5) NTS Pipeline —— TAG Pipeline
Slide 12: Norsk Hydro
Norsk Hydro Alumina refinery COD: March 2024('5) 15-year Gas Supply Contract 30 TBtu Customers & Terminals Update St PortoCem Power Expected COD: July 202515) August 2026") 15-year Power Purchase Capacity Reservation Agreement Agreement Executed lump sum, turnkey EPC contract Notice to Proceed issue
Slide 13: Santa Catarina provides baseload gas supply & critical LNG/gas
Customers & Terminals Update Santa Catarina provides baseload gas supply & critical LNG/gas for upcoming 8+ GW power auction Santa Catarina S” Terminal 14TBtu signed contract to provide baseload gas supply & pipeline balancing to the Bolivia-Brasil Pipeline (TBG) Baseload gas supply TGS connected to
Slide 14: Brazil energy grid is 82% seasonal & intermittent capacity
Customers & Terminals Update Brazil energy grid is 82% seasonal & intermittent capacity Unique case of large electric grid, majority intermittent generation, and growing demand - requires firm capacity Natural gas consumption Power generation Brazil installed capacity Energy consumption installed ca
Slide 15: Brazil regulators forecast GW of firm capacity additions
Customers & Terminals Update Brazil regulators forecast 20 GW of firm capacity additions Brazil's Ministry of Energy: 20+ GW of firm power required to keep system within 5% grid reserve” Expect 8.GW+.capacity.auction.in.2024 for new & existing thermal power plants Teetientiontiantientiontiontiantten
Slide 16: Santa Catarina (TGS) uniquely positioned for upcoming GW power auctions
Customers & Terminals Update Santa Catarina (TGS) uniquely positioned for upcoming 8 GW power auctions i TAG pipeline 260 TBtiyr NTS pipeline 136 TBtu/yr Santa Catarina (TGS) terminal TBG pipeline 9 295 TBtulyt Santa Catarina (TGS) terminal @ Power plants @ >300 TBtu of existing without PPAs | 559 m
Slide 17: Brazil capital plan
Customers & Terminals Update Brazil capital plan Considering capital raise & strategic opportunities for Brazil business in 2024 : ination of f ke the Brazil busi : Size Largest economy in Latin America; >200mm people & ~200 GW power grid Need for Power 75%+ renewable generation requires significant
Slide 18: Agenda
. Executive Summary . Customers & Terminals Update . FLNG Update . Financial Results . Appendix 18
Slide 19: FLNG Update
FLNG Update First FLNG facility is deployed, mechanically complete & in final stages of commissioning Jan 20247) Expected May 2024('8) Expected June 20248) 19
Slide 20: Our first Fast LNG unit is very valuable
FLNG Update Our first Fast LNG unit is very valuable(2”) Value of “in the money” LNG for 4 years Replacement cost at $1,400 per tonne ~$2.0bn + ~$1.0bn ap Combination of replacement cost & current elevated market prices demonstrates significant asset value é 20
Slide 21: LNG market is anticipated to be elevated for next 4 years
FLNG Update LNG market is anticipated to be elevated for next 4 years(23) Greatly increases the value of FLNG $8.00 Caan Forward TTF minus 115% HH net of shipping $6.00 Potential $5.00 total value ~$3.25/MMBtu $4.00 avg. difference L over next $3.00 4 years >| could be S209 Long-term market LNG adde
Slide 22: FLNG Update: Asset financing
& as FLNG Update Longer duration financing Lower loan-to-value & cost of debt Proceeds pay down corporate debt Asset financing $1.5 - $1.75bn 22
Slide 23: Agenda
. Executive Summary . Customers & Terminals Update . FLNG Update . Financial Results . Appendix 23
Slide 24: Financial Results: Another strong quarter on sustained customer volumes
Terminal op. margin Financial Results Another strong quarter on sustained customer volumes Q4 2023 Q1 2024 Qc0QA Downstream Op. Margin (mm) $372 $350 ($22) (+) Cargo Sale Op. Margin ($mm) $1 - ($1) (+) Ships Op. Margin ($mm) $54 $34 ($20) Total Segment Op. Margin (mm) $427 $384 ($43) (-) Core SG&A (
Slide 25: Financial Results: Another strong quarter on sustained customer volumes
Financial Results Another strong quarter on sustained customer volumes Q4 2023 Q1 2024 Qc0QA Adj. Net Income (Loss)(24)($mm) $207 $138 ($69) Adj. EPS ($/share), Dilutect25) $1.01 $0.67 ($0.34) Net Income (Loss) (attributable to Stockholders) Gan $217 $54 ($163) EPS ($/share), Diluted $1.06 $0.26 ($0
Slide 26: Fully funded capital plan & stable financial policy
Financial Results Fully funded capital plan'2®) & stable financial policy Fully funded capital plan via asset sales & free cash flow generation, stable dividend policy, & lowering our target leverage to <2x Disciplined financial policy A stable dividend policy‘2*) rv 6 Fully funded capital program r
Slide 27: Agenda
. Executive Summary . Customers & Terminals Update . FLNG Update . Financial Results . Appendix 27
Slide 28: Appendix: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q1 2023 Net income $151,566 Add: Interest expense 71,673 Add: Tax provision (benefit) 28,960 Add: Depreciation and amortization 34,375 Add: Asset impairment expense - Add: SG&A items excluded from Core SG&A 11,342 Add: Transaction and integrati
Slide 29: Appendix: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Total Segment Operating Margin $480,817 $293,834 $249,687 $427,352 $384,260 Less: Core SG&A 40,796 47,381 41,289 39,780 44,112 Less: Pro rata share of Core SG&A from unconsolidated 14 entities Adjusted EB
Slide 30: Appendix: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q1 2023 Q2 2023 Q3 2023 Total Selling, general and administrative $52,138 $55,803 $49,107 Core SG&A 40,796 47,381 41,289 SG&A items excluded from Core SG&A 11,342 8,422 7,818 Q4 2023 $48,056 39,780 8,276 Q1 2024 $70,754 44,112 26,642 30
Slide 31: Segment operating margin reconciliation, Q1 2024
Appendix Segment operating margin reconciliation Three Months Ended March 31, 2024 ‘i Terminals and P Consolidation A Total A I (in thousands of $) Thain Ships otal Segment Cone thara) Consolidated Total revenues 647,737 42,584 690,321 - 690,321 Cost of sales (1) 229,117 - 229,117 - 229,117 Vessel o
Slide 32: Segment operating margin reconciliation, Q4 2023
Appendix Segment operating margin reconciliation Three Months Ended December 31, 2023 Terminals and Consolidation i i Total a i (in thousands of §) Infrastructure Sits TISagEN “Srietrae) — Cevealleted Total revenues 695,068 63,290 758,358 - 758,358 Cost of sales') 259,976 . 259,976 (1,491) 258,485 V
Slide 33: Segment operating margin reconciliation, Q1 2023
Appendix Segment operating margin reconciliation Three Months Ended March 31, 2023 (in thousands of $) ferminesand Ships Total Segment Consolidation Consolidated Total revenues 502,608 97,917 600,525 (21,394) 579,131 Cost of sales 73,798 - 73,798 111,140 184,938 Vessel operating expenses - 19,239 19
Slide 34: Appendix: Adjusted Net Income & EPS
Appendix Adjusted Net Income & EPS (in thousands of U.S. dollars except for share amounts) Q1 2023 Q4 2023 Q1 2024 Net income (loss) attributable to stockholders (GAAP) 150,206 217,207 54,081 Non-cash impairment charges, net of tax - 10,958 - Loss (gain) on sale of assets - (21,534) 77,140 Loss on d
Slide 35: Appendix: Funds from Operations
Appendix Funds from Operations (in thousands of $ except for share amounts) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Net income attributable to stockholders 150,206 119,248 61,221 217,207 54,081 Depreciation/Amortization 34,375 42,115 48,670 62,164 50,491 Non-cash impairment charges, net of tax - - -
Slide 36: 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, referred to herein as the "Presentation." FORWARD-LOOKING STATEMENTS: All statements contained in t
Slide 37: Disclaimers
Disclaimers PAST PERFORMANCE. Our our past performance is not a reliable indicator or indicative of future results and should not be relied upon for any reason. There can be no assurance that the future performance of the Company, or any project, investment or asset of the Company, will be profitabl
Slide 38: Endnotes
Endnotes 1. “Total Segment Operating Revenue’ is the total of our Terminals and Infrastructure Segment Operating Revenue and Ships Segment Operating Revenue 2, “Illustrative Goals” or Goals means our forward-looking view for the relevant metric. The goals are based on certain managementassumptions a
Slide 39: Endnotes
10. iW. 12. 13. 14, 15. 16. Endnotes Net Income* means Net Income attributable to stockholders as presented in the relevant Form 10-K or Form 10-O for the relevant financial period, “illustrative Net Income Goal’ reflects our illustrative Total Segment Operating Margin, excluding interest expenses f
Slide 40: Endnotes
17. 18. 19. 20. 2. 22. 23. 24, 25. 26. 27. 28. Endnotes “Complete” or “mechanically complete" means that the equipment necessary to liquefy natural gas has been delivered to the site location, “First Gas" or “First LNG" or “First Cargo” refers to the date on which (or, for future dates, management's