New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Q2 2022 Earnings Presentation
49 slides from New Fortress Energy's earnings presentation, August 2022
Slide 1: Q2 2022 Investor Presentation
August 2022 Q2 2022 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. Terminals & Customers 3. Fast LNG 4. Balance Sheet 5. Financial Results 6. Hydrogen 7. Appendix 3
Slide 4: Q2 2022 was a great quarter for the company
Executive Summary Q2 2022 was a great quarter for the company Positioned to exceed Illustrative Adj. EBITDA Goal(1) of ~$1.5bn+ on core business in 2023 Q2 2022 Adj. EBITDA(2) Illustrative Goal of $283mm FY'19 FY'20 FY'21 Q1-22 Q2-22 FY'22 FY'23 Total Segment Over $1bn Adj. EBITDA(2) over Operating
Slide 5: We have many significant updates to highlight this quarter
Executive Summary We have many significant updates to highlight this quarter We continue to focus on accessing customers & adding duration to our portfolio • Mexico: LOI(6) to expand and extend contract with CFE to supply gas to multiple facilities in Baja California Sur • Brazil: Nearing completion
Slide 6: We are in the midst of a continuing energy crisis
Executive Summary We are in the midst of a continuing energy crisis The energy market is severely undersupplied(i)… …and energy prices continue to rise(ii) LNG demand expected to exceed 70 supply by up to 160+ MTPA by 2030 650 60 LNG prices 600 remain elevated 50 550 going forward 500 40 $/MMBtu 450
Slide 7: Reduced gas supply from Russia threatens European energy security
Executive Summary Continued reduced gas supply from Russia is threatening European energy security before winter European gas prices continue to settle at all-time highs EU gas storage needs to be at 90% to make it …while Russian gas pipeline flows to Europe through winter (currently only at ~70%)(i
Slide 8: Agenda
1. Executive Summary 2. Terminals & Customers 3. Fast LNG 4. Balance Sheet 5. Financial Results 6. Hydrogen 7. Appendix 8
Slide 9: Our core business continues to grow globally
Terminals & Customers Our core business continues to grow globally Accessing customers and adding duration to our portfolio is the most important aspect of our business Jamalco CHP We have built a Jamaica Shannon Miami Liquefier Ireland successful & USA Montego Bay Jamaica growing business San Juan
Slide 10: We continue to execute on our commercial plan
Terminals & Customers We continue to execute on our commercial plan Key investment highlights Commercial scorecard • Barcarena near completion(5); commercial operations start(5) in 2023 • Santa Catarina near completion(5); completion(5) expected Q4 2022 2023 Run-Rate(13) 4.5mm GPD Terminals Volumes
Slide 11: Agenda
1. Executive Summary 2. Terminals & Customers 3. Fast LNG 4. Balance Sheet 5. Financial Results 6. Hydrogen 7. Appendix 11
Slide 12: Our Fast LNG business has two primary workstreams
Fast LNG Our Fast LNG business has two primary workstreams We have made significant progress on both of these areas over the past quarter Deployment Construction (sites, permits & installations) (uniform systems & design) 12
Slide 13: Material progress on our first Fast LNG sites & installations
Fast LNG We’ve made material progress on our first Fast LNG sites & installations We’ve increased from 1 to 3 Fast LNG sites in just 4 months ~8 MTPA under Louisiana Altamira(6) Lakach(6) development(4) New Orleans Highly engaged Developing 7-well with regulators 15-year gas completion 1 Louisiana s
Slide 14: Secured all necessary design & construction requirements
Fast LNG We’ve secured all the necessary design & construction requirements Critical long lead items have arrived on time despite supply chain constraints Fast LNG equipment Fast LNG 1, Kiewit Offshore (Texas) Fabrication of modules & conversion of jack-up units on track(16) Q4 2022: Modules install
Slide 15: Our Fast LNG developments are progressing on schedule
Fast LNG Our Fast LNG developments are progressing on schedule(16) Our repeatable design also allows for significant cost and time savings Significant flexibility provided by using Repeatable Fast LNG schedule 3 types of marine infrastructure Name Type Yard Schedule(16) Jack-up rigs Fixed jackets FL
Slide 16: Agenda
1. Executive Summary 2. Terminals & Customers 3. Fast LNG 4. Balance Sheet 5. Financial Results 6. Hydrogen 7. Appendix 16
Slide 17: Fast LNG CapEx is fully funded
Balance Sheet Fast LNG CapEx is fully funded Asset sale proceeds, cash on hand and operating cash flows fully cover(17) capital needs Cash on hand(i) Fully funded(17) on committed capital needs for development of 1st two Fast LNG units ~$2bn raised through asset sales(10,11) Capex Additional develop
Slide 18: Asset sale highlights
Balance Sheet Asset sale highlights 1. Sales of LNG vessels and Sergipe power plant simplify & focus operations on an integrated LNG portfolio 2. Asset sales at strong valuations recycle balance sheet capital into Fast LNG & downstream assets(17) Ships monetization Sergipe sale est. close in August(
Slide 19: Agenda
1. Executive Summary 2. Terminals & Customers 3. Fast LNG 4. Balance Sheet 5. Financial Results 6. Hydrogen 7. Appendix 19
Slide 20: Financial results
Financial Results Financial results On track for FY’22 Illustrative Adj. EBITDA Goal(1) of ~$1bn+ Q2 2021 Q2 2022 YoY Change Total Seg. Revenue ($mm) $277 $654 $377 • $283mm of Adj. EBITDA(2) for Q2 Total Seg. Op. Margin(3) ($mm) $130 $327 $197 2022; on track for Illustrative Adj. EBITDA Goal(1) of
Slide 21: Incredible progress since our IPO
Financial Results Incredible progress since our IPO NFE is exceeding expectations for Illustrative Adj. EBITDA IPO Goal 2022 Current Goals 2022 FY 2024 Goals Goal(1) & Illustrative Adj. EBITDA Goal(1) per share IPO Current Current Revenue ~$1.5bn $2.5bn $6-10bn We forecasted $550mm Illustrative Adj.
Slide 22: Rating upgrade plan and objectives
Financial Results Rating upgrade plan and objectives We continue to progress toward our goal of an investment grade credit rating Establishing Simplifying & Expanding earnings track record de-levering net spread business 12-month trailing Adj. Simplification of Highly predictable EBITDA(2) of $1bn b
Slide 23: Agenda
1. Executive Summary 2. Terminals & Customers 3. Fast LNG 4. Balance Sheet 5. Financial Results 6. Hydrogen 7. Appendix 23
Slide 24: D.C. strongly endorsing hydrogen as a climate solution
Hydrogen D.C. strongly endorsing hydrogen as a climate solution Zero Parks is well-positioned to utilize hydrogen production incentives included in the Inflation Reduction Act The Inflation Reduction Act of 2022 represents the largest climate investment in U.S. history What does the legislation offe
Slide 25: Key ingredients secured for our first green hydrogen hub
Hydrogen We have secured the key ingredients for our first green hydrogen hub Amid an increasingly positive policy environment, we are preparing to start construction(4) in the coming weeks Located in a global energy hub and Key ingredients secured(4) proximal to major industrial demand Site Permits
Slide 26: We also have a blue hydrogen project in the works
Hydrogen We also have a blue hydrogen project in the works We are looking to convert natural gas into clean blue hydrogen Located near stranded natural gas fields Key ingredients in progress(4) offering ample low-cost feedstock carbon capture Site Permits Feedstock Natural gas Steam methane of more
Slide 27: Agenda
1. Executive Summary 2. Terminals & Customers 3. Fast LNG 4. Balance Sheet 5. Financial Results 6. Hydrogen 7. Appendix 27
Slide 28: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q2 2021 Q1 2022 Q2 2022 Net (loss) income ($1,734) $241,181 ($178,431) Add: Interest expense (net of interest income) 31,482 44,916 47,840 Add: Tax (benefit) provision 4,409 (49,681) (86,539) Add: Depreciation and amortization 26,997 34,290 36,
Slide 29: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q2 2021 Q1 2022 Q2 2022 Total Segment Operating Margin $130,034 $300,083 $327,448 Less: Core SG&A 36,277 40,960 42,040 Less: Pro rata share of Core SG&A from unconsolidated entities 1,570 1,390 1,914 Adjusted EBITDA (non-GAAP) $92,187 $257,733
Slide 30: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q2 2021 Q1 2022 Q2 2022 Total Selling, general and administrative $44,536 $48,041 $50,310 Core SG&A 36,277 40,960 42,040 SG&A items excluded from Core SG&A 8,259 7,081 8,270 30
Slide 31: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended June 30, 2022 Consolidation (in thousands of $) Terminals and Infrastructure (1) Ships (2) Total Segment Consolidated and Other (3) Total revenues 543,455 111,024 654,479 (69,624) 584,855 Cost of sales 271,948 - 271,948 453 272,401
Slide 32: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended March 31, 2022 Terminals and Consolidation (in thousands of $) Ships (2) Total Segment Consolidated Infrastructure (1) and Other (3) Total revenues 480,349 114,942 595,291 (90,173) 505,118 Cost of sales 235,532 - 235,532 (27,234) 20
Slide 33: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended December 31, 2021 Terminals and Consolidation (in thousands of $) Ships (2) Total Segment Consolidated Infrastructure (1) and Other (3) Total revenues 689,770 117,796 807,566 (158,935) 648,631 Cost of sales 382,816 - 382,816 (100,33
Slide 34: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended September 30, 2021 Terminals and Consolidation (in thousands of $) Ships (2) Total Segment Consolidated Infrastructure (1) and Other (3) Total revenues 349,140 116,050 465,190 (160,534) 304,656 Cost of sales 206,131 - 206,131 (70,69
Slide 35: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended June 30, 2021 Terminals and Consolidation (in thousands of $) Ships Total Segment Consolidated Infrastructure and Other (1) Total revenues 181,548 95,762 277,310 (53,471) 223,839 Cost of sales 103,451 - 103,451 (2,021) 101,430 Vesse
Slide 36: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q3 2021 Q4 2021 Q1 2022 Q2 2022 LTM Net (loss) income ($17,769) $151,723 $241,181 ($178,431) $196,704 Add: Interest expense (net of interest income) 57,595 46,567 44,916 47,840 196,918 Add: Tax (benefit) provision 3,526 5,403 (49,681) (86,539)
Slide 37: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q3 2021 Q4 2021 Q1 2022 Q2 2022 YTD Q2 2022 Total Segment Operating Margin $210,478 $373,150 $300,083 $327,448 $1,211,159 Less: Core SG&A 38,496 38,033 40,960 42,040 159,529 Less: Pro rata share of Core SG&A from unconsolidated entities 2,047 1
Slide 38: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q3 2021 Q4 2021 Q1 2022 Q2 2022 YTD Q2 2022 Total Selling, general and administrative $40,543 $39,143 $48,041 $50,310 $178,037 Core SG&A 38,496 38,033 40,960 42,040 159,529 SG&A items excluded from Core SG&A 2,047 1,110 7,081 8,270 18,508 38
Slide 39: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) FY’19 FY’20 FY’21 Net (loss) income ($204,319) ($263,965) $92,711 Add: Transaction and integration costs - 4,028 44,671 Add: Contract termination charges and loss on mitigation 5,280 124,114 - sales Add: Depreciation and amortization 7,940 32,3
Slide 40: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) FY’19 FY’20 FY’21 Total Segment Operating Margin per Form 10-K ($21,133) $125,302 $746,430 Less: Core SG&A (see below definition) 94,133 91,980 137,144 Less: Pro rata share of Core SG&A from unconsolidated entities - - 4,726 Adjusted EBITDA (no
Slide 41: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Year Ended December 31, 2021 Terminals and Consolidation (in thousands of $) Ships (2) Total Segment Consolidated Infrastructure (1) and Other (3) Total revenues 1,366,142 329,608 1,695,750 (372,940) 1,322,810 Cost of sales 789,069 - 789,069 (173,059)
Slide 42: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Year Ended December 31, 2020 Terminals and Consolidation (in thousands of $) Ships (2) Total Segment Consolidated Infrastructure (1) and Other (3) Total revenues 451,650 - 451,650 - 451,650 Cost of sales 278,767 - 278,767 - 278,767 Vessel operating ex
Slide 43: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Year Ended December 31, 2019 Terminals and Consolidation (in thousands of $) Ships (2) Total Segment Consolidated Infrastructure (1) and Other (3) Total revenues 189,125 - 189,125 - 189,125 Cost of sales 183,359 - 183,359 - 183,359 Vessel operating ex
Slide 44: Adjusted Net Income & Earnings per Share
Appendix Adjusted Net Income & Earnings per Share The following table sets forth a reconciliation between net loss attributable to stockholders and earnings per share adjusted for non-cash impairment charges. Q2 2021 Q2 2022 Net loss attributable to stockholders ($6,044) ($169,765) Non-cash impairme
Slide 45: 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: All statements contained i
Slide 46: Endnotes
Endnotes 1. “Illustrative Adjusted EBITDA Goal” is based on the "Illustrative Total Segment Operating Margin Goal" less illustrative Core SGA assumed to be at $172mm in 2022 and $145mm for all periods 2023 onward including the pro rata share of Core SG&A from unconsolidated entities. “Illustrative T
Slide 47: Endnotes
Endnotes 2. “Adjusted EBITDA” is not a measurement of financial performance under GAAP and should not be considered in isolation or as an alternative to income/(loss) from operations, net income/(loss), cash flow from operating activities or any other measure of performance or liquidity derived in a
Slide 48: Endnotes
Endnotes 3. “Total Segment Operating Margin” is the total of our Terminals and Infrastructure Segment Operating Margin and Ships Segment Operating Margin. Terminals and Infrastructure Segment Operating Margin includes our effective share of revenue, expenses and operating margin attributable to our
Slide 49: Endnotes
Endnotes 10. Refers to the definitive share purchase agreement executed among Ebrasil Energia Ltda. and its shareholders (“Ebrasil”), a subsidiary of NFE and Eneva S.A. (“Eneva”) for the sale by NFE and Ebrasil to Eneva of 100% of the equity interests of the Porto de Sergipe Power Plant, including 1