New Fortress Energy Inc. · NASDAQ:NFE
New Fortress Energy — Q1 2022 Earnings Presentation
42 slides from New Fortress Energy's earnings presentation, May 2022
Slide 1: Q1 2022 Investor Presentation
May 2022 Q1 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. FSRU Update 3. Fast LNG Update 4. Hydrogen Update 5. Financial Update 6. Appendix 3
Slide 4: Executive Summary
Executive Summary Q1 2022 was another great quarter for the company Poised to reach Illustrative Adj. EBITDA Goal(1) of ~$1.5bn+ next year Q1 2022 Illustrative Adj. EBITDA(1) of Total Segment FY'19 ($21) FY'20 $125 FY'21 $746 Q1-22 $300 FY'22 FY'23 $1.1bn+ $1.6bn+ $258mm Operating Margin(3) (-) Core
Slide 5: Volumes on track to hit Adj. EBITDA goals with upside from Fast LNG
Executive Summary Volumes on track to hit Adj. EBITDA(1) goals with significant potential upside from Fast LNG Company volumes (TBtu) Highlights 625 Through 2023, NFE has 30 TBtu of existing 500 supply that has not been committed to terminals 520 or cargo sales 375 268 2 FLNGs are expected to 250 co
Slide 6: Tale of two gas markets: 2022-2025 and 2026+
Executive Summary Tale of two gas markets: 2022-2025 and 2026+ The war in Ukraine has exacerbated a structural shortfall in the global LNG market Expected LNG supply additions (MTPA) ~ 400 MTPA of operating liquefaction facilities 550 Est. 2025 Demand Total new production from 500 2023-2025 is ~30 M
Slide 7: Global energy crisis exacerbated by ongoing war in Ukraine
Executive Summary Global energy crisis exacerbated by ongoing war in Ukraine Cost, access, and reliability risks especially for developing economies We believe the global energy crisis will have significant and long-lasting implications: Energy Agriculture Inflation Climate change Developing economi
Slide 8: Energy markets experienced a seismic shift when Russia invaded Ukraine
Executive Summary Energy markets experienced a seismic shift when Russia invaded Ukraine The world is experiencing significant consequences and will continue to for the years ahead Energy security has become more important than energy costs and emissions In normal times, 1/4/2021(i) 5/4/2022(i) ther
Slide 9: What does this mean for our business?
Executive Summary What does this mean for our business? Key opportunities we will provide updates on today: FSRUs Fast LNG Hydrogen Critical market need Ability to supply Transition to for additional market with alternative energy regasification additional LNG sources has never infrastructure volume
Slide 10: Agenda
1. Executive Summary 2. FSRU Update 3. Fast LNG Update 4. Hydrogen Update 5. Financial Update 6. Appendix 10
Slide 11: Existing regas capacity in NW Europe not sufficient
FSRU Update Existing regas capacity in NW Europe not sufficient to meet supply needs excluding Russian gas Current regas capacity(i) 3 FSRU terminals 24 land-based terminals 153 MTPA (All Europe) 103 MTPA (excluding Iberia) Existing terminal (i) Sources: Global Energy Monitor, Gas Infrastructure Eur
Slide 12: Significant additional regas capacity needed to replace Russian gas flows
FSRU Update Significant additional regas capacity needed to replace Russian gas flows Approximately 18 FSRU projects announced but >30 FSRUs needed to displace the ~100 MTPA equivalent of Russian gas(i) proposed terminals, 18 all FSRUs(ii) 46 FSRUs in global fleet (ii) 7 NFE owned FSRUs Proposed FSR
Slide 13: NFE has FSRUs available now, additional conversion in process
FSRU Update NFE has 2 FSRUs available now, 1 additional conversion in process NFE’s FSRUs can add significant regas capacity in the near term NFE FSRU fleet Vessel Storage capacity Capacity (MTPA) Term FSRU charter rates are up Charter Golar Nanook 170k m3 5.4 Q2 2044 $50-100k/day, allowing for incr
Slide 14: Agenda
1. Executive Summary 2. FSRU Update 3. Fast LNG Update 4. Hydrogen Update 5. Financial Update 6. Appendix 14
Slide 15: We've made material progress on permitting Fast LNG
Fast LNG Update We’ve made material progress on permitting Fast LNG We’ve already filed(6) for two 1.4 MTPA units with six more 1.4 MTPA units in the pipeline Congo (Eni) Finalizing Expect Texas contract to deploy with Eni 2H 2023 Expect to file permits for six additional 1.4 MTPA units in offshore
Slide 16: Significant investment in people and resources for Fast LNG
Fast LNG Update We have made a significant investment in people & resources to execute on our Fast LNG plans We’ve developed a methodical process & created a world-class team to implement it industry-leading partners Assembled Established Opened world-class team functional groups to Houston, TX of e
Slide 17: Our first units are already being assembled
Fast LNG Update Our first units are already being assembled Our modular design allows for speed and scalability Creating a Fast LNG “factory” Development updates Liquefier modules Marine infrastructure Purchased long-lead items for 3 units & soon to be purchased for 4th unit 3 Self-elevating platfor
Slide 18: Scalable, modular design results in expedited timelines
Fast LNG Update Our scalable, modular design results in expedited timelines Our first Fast LNG unit targeted to be completed in Q2 2023, with units 2 and 3 following right after Construction timeline Our goal is to commission the Engineering & first 3 Fast LNG units procurement Construction & safely
Slide 19: Breaking down the economics of Fast LNG
Fast LNG Update Breaking down the economics of Fast LNG What is each Fast LNG unit potentially worth?(i) x $10/MMBtu = $700mm Each 1.4 MTPA x $15/MMBtu = $1050mm x 8 units = 70 TBtu x $20/MMBtu = $1400mm World Bank 2022 $34/MMBtu price forecast(ii) 2023 $25/MMBtu 2024 $22/MMBtu (i) Illustrative metr
Slide 20: Agenda
1. Executive Summary 2. FSRU Update 3. Fast LNG Update 4. Hydrogen Update 5. Financial Update 6. Appendix 20
Slide 21: Key ingredients for commercialization and growth
Hydrogen Update Key ingredients for commercialization and growth We intend to be an early mover and clear leader in the vast and rapidly evolving clean hydrogen market 1 2 3 4 Electrolyzers Renewable power Land & sites People Solidifying partnerships Constructing portfolio Securing optimal sites Bui
Slide 22: Scaling the business through acquisition of additional sites in the U.S.
Hydrogen Update Scaling the business through acquisition of additional sites in the U.S. We are working in parallel to secure additional sites with key attributes for the Zero Parks model Key site attributes: Low-cost renewable power Nearby power, industrial or transport demand Accessible Areas with
Slide 23: Zero Parks progress is on track
Hydrogen Update Zero Parks progress is on track Scalable model with activities integrated throughout the hydrogen value chain Next Near future few months 2023+ • Achieve FID(7) and break ground • Secure optimal sites for future • Develop portfolio of on our first project (U.S. Gulf development hydro
Slide 24: Agenda
1. Executive Summary 2. FSRU Update 3. Fast LNG Update 4. Hydrogen Update 5. Financial Update 6. Appendix 24
Slide 25: Financial results
Financial Update Financial results Another record setting quarter with our highest ever reported Net Income and EPS Q1 2021 Q1 2022 YoY Change • $258mm of Adj. EBITDA(1) for Q1 Total Seg. Revenue ($mm) $146 $595 $449 2022; on track for Illustrative Adj. EBITDA Goal(2) of $1bn+ for FY 2022 Total Seg.
Slide 26: $2-2.5bn in liquidity
Financial Update Our strong balance sheet is well positioned for credit rating upgrades Solid financial foundation Strengthened by asset sales We intend to continue to upgrade our We expect to fund our growth through corporate debt rating through strong financials 100% internally-generated capital v
Slide 27: Agenda
1. Executive Summary 2. FSRU Update 3. Fast LNG Update 4. Hydrogen Update 5. Financial Update 6. Appendix 27
Slide 28: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q1 2021 Q4 2021 Q1 2022 Net (loss) income ($39,509) $151,723 $241,181 Add: Interest expense (net of interest income) 18,680 46,567 44,916 Add: Tax (benefit) provision (877) 5,403 (49,681) Add: Depreciation and amortization 9,890 30,297 34,290 A
Slide 29: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q1 2021 Q4 2021 Q1 2022 Total Segment Operating Margin $32,761 $373,150 $300,083 Less: Core SG&A 24,129 38,033 40,960 Less: Pro rata share of Core SG&A from unconsolidated entities - 1,110 1,390 Adjusted EBITDA (non-GAAP) $8,632 $334,007 $257,7
Slide 30: Adjusted EBITDA
Appendix Adjusted EBITDA (in thousands of U.S. dollars) Q1 2021 Q4 2021 Q1 2022 Total Selling, general and administrative $33,617 $74,927 $48,041 Core SG&A 24,129 38,033 40,960 SG&A items excluded from Core SG&A 9,488 36,894 7,081 30
Slide 31: 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 32: 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 33: Segment operating margin reconciliation
Appendix Segment operating margin reconciliation Three Months Ended March 31, 2021 Terminals and Consolidation (in thousands of $) Ships Total Segment Consolidated Infrastructure and Other (1) Total revenues 145,684 - 145,684 - 145,684 Cost of sales 96,671 - 96,671 - 96,671 Vessel operating expenses
Slide 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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 40: Endnotes
Endnotes 1. “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 41: Endnotes
Endnotes 2. “Illustrative Adjusted EBITDA Goal” is based on the "Illustrative Total Segment Operating Margin Goal" less illustrative Core SGA assumed to be at $145M including the pro rata share of Core SG&A from unconsolidated entities. “Illustrative Total Segment Operating Margin Goal,” or “Illustr
Slide 42: 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