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Excelerate Energy(EE) - 2024 Q3 - Earnings Call Transcript
EEExcelerate Energy(EE)2024-11-09 16:45
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Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2024 was 92million,anincreaseof92 million, an increase of 3 million or approximately 4% compared to the previous quarter, primarily driven by lower operating costs and higher gas sales margins [26][7] - Total debt, including finance leases, was 716million,withcashandcashequivalentsof716 million, with cash and cash equivalents of 608 million at the end of Q3 2024 [28] - The company raised and narrowed its adjusted EBITDA guidance for 2024 to a range of 335millionto335 million to 345 million, driven by higher margins and lower vessel operating costs [32] Business Line Data and Key Metrics Changes - The core regasification business continues to deliver consistent results, underpinned by a contract portfolio with about 4billioninfuturerevenueandaweightedremainingtermofsevenyears[7]−MaintenanceCapExforQ32024was4 billion in future revenue and a weighted remaining term of seven years [7] - Maintenance CapEx for Q3 2024 was 4 million, with year-to-date spending of approximately 35million,primarilyforupgradestotheExcelsiorvessel[26]MarketDataandKeyMetricsChanges−Excelerate′stwoFSRUsdeliverapproximately3435 million, primarily for upgrades to the Excelsior vessel [26] Market Data and Key Metrics Changes - Excelerate's two FSRUs deliver approximately 34% of Bangladesh's natural gas supply, highlighting the company's significant market presence [25] - A new 15-year LNG supply agreement with Petrobangla is expected to generate approximately 15 million to 18millionofEBITDAannuallystartingin2026[15]CompanyStrategyandDevelopmentDirection−ThecompanyaimstobethegloballeaderinFSRUsanddownstreamLNGinfrastructure,focusingonoptimizingitscoreregasificationbusinessandexpandingitsfleet[6][11]−ExcelerateispursuingopportunitiesinVietnam,arapidlygrowingmarketforLNG,throughastrategicpartnershipwithPetroVietnamTechnicalServicesCorporation[19][20]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthecompany′sabilitytogeneratesustainableearningsandexecuteadisciplinedcapitalallocationplan[10][56]−Thecompanyiswell−positionedtosupportBangladesh′senergyneedsandiscommittedtofutureenergyprojectsintheregion[24][25]OtherImportantInformation−Thecompanyannouncedaquarterlycashdividendincreaseto18 million of EBITDA annually starting in 2026 [15] Company Strategy and Development Direction - The company aims to be the global leader in FSRUs and downstream LNG infrastructure, focusing on optimizing its core regasification business and expanding its fleet [6][11] - Excelerate is pursuing opportunities in Vietnam, a rapidly growing market for LNG, through a strategic partnership with PetroVietnam Technical Services Corporation [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate sustainable earnings and execute a disciplined capital allocation plan [10][56] - The company is well-positioned to support Bangladesh's energy needs and is committed to future energy projects in the region [24][25] Other Important Information - The company announced a quarterly cash dividend increase to 0.06 per share, reflecting the strength of its balance sheet and cash generation capabilities [31] - A two-year 50millionsharerepurchaseprogramisunderway,withapproximately50 million share repurchase program is underway, with approximately 28 million utilized year-to-date [30] Q&A Session Summary Question: Clarification on the new supply agreement - The new supply agreement is expected to have a locked-in margin, and while the length is described as midterm, it is considered a multiyear deal [35][36] Question: Growth opportunities outside of FSRUs - The company is open to investing in additional assets and infrastructure for onshore regasification to meet pressing global LNG needs [40] Question: Maintenance CapEx guidance decrease - The decrease in maintenance CapEx guidance is due to lower-than-expected spending on vessel upgrades, with expectations for an increase in 2025 due to two dry docks [41][44] Question: LNG carrier conversion timeline - The conversion of an LNG carrier to an FSRU is expected to take about a year, depending on specifications and engineering requirements [50] Question: New build FSRU delivery and EBITDA generation - The new build FSRU is expected to generate EBITDA shortly after delivery in June 2026, with potential for higher per vessel generation compared to the current fleet [53][54]