New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Q3 2023 Earnings Presentation
37 slides from New Fortress Energy's earnings presentation, November 2023
Slide 1: Q3 2023 Investor Presentation
November 2023 Q3 2023 Investor Presentation
Slide 2: Agenda
1. Executive Summary 2. Construction Update 3. Capex Update 4. Financial Results 5. Appendix 2
Slide 3: Executive Summary: several significant updates this quarter
Executive Summary We have several significant updates to highlight this quarter Terminals Construction(2) Financing We operate our integrated gas to power We have completed nearly We completed our $850mm financing & business around the world all construction now have a fully funded capital plan(3) •
Slide 4: Quarterly financial results & Goals
Executive Summary Quarterly financial results & Goals(5) Contracted downstream Achieved Adj. EBITDA(4) Reiterating Goals(5) of assets(11) account for of $208mm ~$1.6bn in 2023(6) & ~$2.4bn in 2024(6) nearly 100% of Q3’23 for Q3 2023 Adj. EBITDA(4) Illustrative Goals(5) Expecting significant Q3’23 Il
Slide 5: We are significantly undervalued
Executive Summary We are significantly undervalued Illustrative Goals(5) Price / EPS(13)(14) EV / EBITDA(6)(15) EPS CAGR(13)(16) (2024) (2024) (2022-2024) #1. Industrial REITs 35.8x 18.2x (3%) #2. LNG 16.1x 11.1x 21% Valuation #3. Utilities 15.0x 10.5x 4% #4. Midstream Infrastructure 13.1x 9.5x 12%
Slide 6: Agenda
1. Executive Summary 2. Construction Update 3. Capex update 4. Financial Results 5. Appendix 6
Slide 7: Project/infrastructure updates
Construction Update Project/infrastructure updates We have a number of significant projects that are at or near completion(1) Project Expected COD(1) Description 1.4 MTPA liquefaction facility located offshore Altamira, Mexico; First FLNG, Mexico Dec. 2023 receives gas from the Sur de Texas-Tuxpan p
Slide 8: First FLNG unit is installed & has achieved First Gas
Construction Update First FLNG unit is installed & has achieved First Gas(18) Our timeline FID(31) March 2021 COD(1) December 2023 1.4 MTPA production volume Constructed in less than Fastest LNG provides incremental supply ½ the time of traditional development project to fulfill downstream needs liq
Slide 9: Barcarena, Brazil terminal to start in December 2023
Construction Update Barcarena, Brazil terminal to start(1) in December 2023 Barcarena Start date: December 2023 FSRU: Energos Celsius (currently finalizing conversion works) Norsk Hydro(19) contract: 30 TBtu, 15-year contract starting Jan. 2024 630 MW power plant: 25-year PPA starting Q3 2025, const
Slide 10: Santa Catarina, Brazil terminal to come online in January 2024
Construction Update Santa Catarina, Brazil terminal to come online(1) in January 2024 Santa Catarina Start date: January 2024 Terminal & pipeline FSRU: Energos Winter Pipeline: 32km pipeline connects terminal to main transport pipeline system Connected to TBG pipeline: Pipeline system currently supp
Slide 11: 350-400 MW of FEMA power recently online in Puerto Rico
Construction Update 350-400 MW of FEMA power recently online in Puerto Rico Through our San Juan facility, 2 power installations & subsidiary GeneraPR(20), we manage majority of the island’s generation assets NFE built & operated assets GeneraPR operated assets Our subsidiary, GeneraPR, took over PR
Slide 12: 135 MW La Paz, Mexico power plant now online
Construction Update 135 MW La Paz, Mexico power plant now online(1) Achieved COD(1) in September 2023 Provides much needed cleaner & more reliable energy to the grid Agreement to sell plant to CFE (Mexico’s power utility) in 2024(21), further enhancing NFE’s ability to internally fund strategic grow
Slide 13: Nicaragua power plant complete, terminal COD expected June 2024
Construction Update Nicaragua power plant complete, terminal COD expected in June 2024(1) 290 MW power plant largely complete(1) 3 MTPA LNG terminal expected completion in June 2024(1) 25-year PPA 13
Slide 14: Agenda
1. Executive Summary 2. Construction Update 3. Capex Update 4. Financial Results 5. Appendix 14
Slide 15: Liquidity & net Capex through 2024
Capex Update Liquidity & net Capex(12) through 2024(i) $mm Capex (Rem. Gross)(12) Financing Net(12) Beginning Cash - - ~$250 FLNG 1(28) ~($100) - ~($100) FLNG 2(28) ~($300) - ~($300) Terminals (Nicaragua, Brazil, Puerto Rico) ~($125) - ~($125) Ships ~($25) - ~($25) Term Loan B (Net Proceeds) - ~$380
Slide 16: Agenda
1. Executive Summary 2. Construction Update 3. Capex Update 4. Financial Results 5. Appendix 16
Slide 17: Realized $208mm of Adj. EBITDA for Q3'23
Financial Results Realized $208mm of Adj. EBITDA(4) for Q3’23 Q1 2023 Q2 2023 Q3 2023 YTD Terminal Downstr. Op. Margin ($mm) $15 $49 $195 $259 100% of Q3’23 Terminal operating (+) Cargo Sale Op. Margin Segment Op. Margin margin $387(i) $191 - $578 ($mm) comes from downstream (+) Ships Op. Margin ($m
Slide 18: NFE credit ratings: clear path to additional upgrades
Financial Results NFE credit ratings: clear path to additional upgrades Reduction in Increased asset Continued stable Free cash FLNG net debt scale & diversity operating & financial generation commissioning & performance operations • Targeting reduction Adding to portfolio: • NFE continues to • As C
Slide 19: Earnings goals & estimated Free Cash Flow
Financial Results Earnings goals & estimated Free Cash Flow(23) Goals breakdown Illustrative Goals(5) FY 2022 FY 2023 FY 2024 Earnings: Adj. EBITDA ($mm) $1,071 ~$1,600(i)(6) ~$2,400(i)(6) (+/-) Taxes ($mm) $123 ~($200) ~($300) (-) Interest ($mm) ($237) ~($300) ~($400) (-) Other ($mm)(24) ($629) ~($
Slide 20: Agenda
1. Executive Summary 2. Construction Update 3. Capex Update 4. Financial Results 5. Appendix 20
Slide 21: The latest for ZeroPark I
Appendix - Hydrogen The latest for ZeroPark I Advancing one of the largest green hydrogen projects in North America ZeroPark I 200 MW-scale rendering Offtake Technology Delivering ZPI • Entered into a • Leading the • Preliminary site work hydrogen supply electrolysis technology completed & long lead
Slide 22: What ZeroParks means for NFE shareholders
Appendix - Hydrogen What ZeroParks means for NFE shareholders We have a highly profitable project portfolio that will be delivered in 2025 Site Utilities Offtake FID(31) ZeroPark I (Beaumont, TX) 3 ZeroParks = Pacific ~$150mm In process In process 1H 2024 Northwest EBITDA(25) Northeast In process In
Slide 23: Adjusted EBITDA
Appendix Adjusted EBITDA(4) (in thousands of U.S. dollars) Q1 2023 Q2 2023 Q3 2023 2023 YTD Net income $151,566 $120,100 $62,338 $334,004 Add: Interest expense 71,673 64,396 64,822 200,891 Add: Tax provision (benefit) 28,960 15,322 25,194 69,476 Add: Depreciation and amortization 34,375 42,115 48,67
Slide 24: Adjusted EBITDA
Appendix Adjusted EBITDA(4) (in thousands of U.S. dollars) FY 2021 FY 2022 Net income $92,711 $184,786 Add: Interest expense 154,324 236,861 Add: Tax provision (benefit) 12,461 (123,439) Add: Depreciation and amortization 98,377 142,640 Add: Asset impairment expense — 50,659 Add: SG&A items excluded
Slide 25: Adjusted EBITDA
Appendix Adjusted EBITDA(4) (in thousands of U.S. dollars) Q1 2023 Q2 2023 Q3 2023 2023 YTD Total Segment Operating Margin $480,817 $293,834 $249,687 $1,024,338 Less: Core SG&A 41,067 47,381 41,289 129,737 Less: Pro rata share of Core SG&A from unconsolidated entities 14 — — 14 Adjusted EBITDA (non-
Slide 26: Selling, general & administrative reconciliation
Appendix Selling, general & administrative reconciliation (in thousands of U.S. dollars) Q1 2023 Q2 2023 Q3 2023 2023 YTD Total Selling, general and administrative $52,138 $55,803 $49,107 $157,048 Core SG&A 41,067 47,381 41,289 129,737 SG&A items excluded from Core SG&A 11,071 8,422 7,818 27,311 26
Slide 27: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended September 30, 2023 (in thousands of $) Terminals and Total Segment Consolidation Consolidated Ships Infrastructure and Other (2) Total revenues 447,905 66,557 514,462 — 514,462 Cost of sales (1) 192,343 — 192,343 (423) 191,920 Vesse
Slide 28: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended June 30, 2023 (in thousands of $) Terminals and Total Segment Consolidation Consolidated Ships Infrastructure and Other (2) Total revenues 495,504 65,841 561,345 — 561,345 3,397 Cost of sales (1) 222,371 — 222,371 225,768 Vessel ope
Slide 29: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended March 31, 2023 (in thousands of $) Terminals and Total Segment Consolidation Consolidated Ships Infrastructure and Other (2) Total revenues 502,608 97,917 600,525 (21,394) 579,131 Cost of sales (1) 73,798 — 73,798 111,140 184,938 Ve
Slide 30: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Year Ended December 31, 2022 (in thousands of $) Terminals and Total Segment Consolidation and Consolidated Ships (2) Infrastructure (1) Other (3) Total revenues 2,168,565 444,616 2,613,181 (244,909) 2,368,272 Cost of sales 1,142,374 — 1,142,374 (131,
Slide 31: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Year Ended December 31, 2021 (in thousands of $) Terminals and Total Segment Consolidation and Consolidated Ships (2) Infrastructure (1) 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 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: All statements contained i
Slide 33: Disclaimers
Disclaimers FORWARD-LOOKING STATEMENTS (con’t.). These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of the Company’s forward-looking statements. Other known or unpredictable factors could also have material
Slide 34: Endnotes
Endnotes 1. “Online”, “In Operation”, “Operational”, "Operating", "Completion", "Completed", “COD” or “commercial operation date”, “Deployment” or similar statuses (either capitalized or lower case) with respect to a particular project means we expect gas to be made available in the near future, gas
Slide 35: Endnotes
Endnotes 6. “Illustrative Adjusted EBITDA Goal” means our forward-looking goal for Adjusted EBITDA for the relevant period and is based on the "Illustrative Total Segment Operating Margin Goal" less illustrative Core SGA assumed to be at $160mm for all periods 2024 onward including the pro rata shar
Slide 36: Endnotes
Endnotes 14. Price/EPS is calculated by diving the closing price of NFE stock on November 7, 2023 by the Company’s Illustrative EPS Goal for 2024. 15. EV/EBITDA is calculated by dividing the Enterprise Value of the Company by the Company’s Illustrative Adjusted EBITDA Goal for 2024. The Enterprise v
Slide 37: Endnotes
Endnotes 24. “Other” includes for the period presented (i) asset impairment expense, (ii) SG&A items excluded from Core SG&A, (iii) transaction and integration costs, (iv) Other (income) expense, (v) changes in fair value of non-hedge derivative instruments and contingent consideration, (vi) loss on