New Fortress Energy Inc.

Good day, everyone, and welcome to the NFV second quarter 2023 earnings conference call. Today's conference is being recorded, and all phone participants are in a listen-only mode, but later you will have the opportunity to ask questions. To get us started today with opening remarks and introductions, I am pleased to turn the floor to Managing Director of Strategy and Investor Relations, Mr. Chance Pipitone. Please go ahead, sir.

Perfect. Thank you, Jim, and good morning, everyone. Thank you for joining today's conference call, where we will discuss our second quarter 2023 results, recent developments, operational highlights, and future here at New Fortress Energy. As Jim mentioned, the call is being recorded and will be available for replay on the investors section of our website under the subheading events and presentations. In the same location, you will find a press release regarding our second quarter 2023 results and the corresponding presentation that we will walk through on today's call. As we proceed through the discussion, we will be referring to that presentation. In that same presentation, you will also find a series of important disclosures related to forward-looking statements and non-GAAP financial measures. We encourage participants to review these important disclosures in addition to the description of risk factors contained within our SEC filings. Now let's dive into the call. My name is, again, Chance Pipitone, and joining me today at New Fortress Energy are Wes Edens, our Chairman and Chief Executive Officer, Chris Junta, our CFO, Andrew Deedy, our Managing Director of New Business, and other managers of our senior leadership team. Wes, over to you. Great.

Thanks, Chance, and welcome, everybody. Lots to talk about today. So let's start with page number three of the numbers and go from there. Quarter results for the quarter were solid. You know, the EBITDA for the quarter, $246 million. It's down from the first quarter. Virtually 100% of that is just a function of the geography of timing of some cargo sales. The core earnings are basically flat quarter over quarter. Compared to the first half of last year, we're up significantly. So $541 million last year in the first half, $686 million in this year. Perhaps more importantly, the guidance that we see now for the rest of the year, $1.6 billion for 2023 and $2.4 billion in 2024. A little bit of reduction of guidance for this year just as a function of a few of the projects delivering late but still very, very solid earnings for the rest of the year, and our future is incredibly bright. If you flip to page number four, this is a very, very interesting page in the beginning of the presentation. So to say the least, these are very exciting times for the company. After many years of hard work and many billions invested, we now have five major infrastructure projects all delivering essentially at the same time. Having $3.2 billion invested in projects that turn into productive revenue-producing assets is life-changing for the company, and there's a couple of material points here. One, it greatly increases our revenue potential as a company. Obviously, you're converting construction projects into revenue-producing assets, and that's obviously a huge, huge change. Two is it changes the nature of our company from one that is a mix today of about 50% of our revenues coming from merchant sales to customer volumes to one that's virtually all customer sales going forward. That greatly improves both the quality and reliability and transparency of our earnings going forward. You're going to see that manifest itself both the second half of this year and then going on into the future. Three, it opens up a number of new markets to us, huge markets with tremendous potential. I'll click through the major ones now. Puerto Rico, which is already a market for us but is now much, much larger with the acquisition of the PREPA fleet, Panera, the temporary projects we've done there. Brandon McElmurtry will talk about that in detail, but as we will explain, this is a massive, massive opportunity for the company. Number two, Brazil. Two large terminals coming online that greatly increase our capacity as a company, increasing total capacity of throughput by nearly 35%. Huge addressable market, our first entry into it, both of them coming online in the next few weeks. Three, Ireland. We won our first power auction last quarter, and we believe we're finally very close to being the first and only LNG terminal in the country. All these together are increasing our capacity to grow materially, and most importantly, without material amounts of additional capex. This is truly the apex of our capital spend, and we now need to just operate and grow revenues with very little additional capital spent. It's an amazing moment for us as a company. In the next 30 to 60 days, it will be transformational to us It is all made possible through the hard work and dedication of literally thousands of people that have made this happen. Just a little context to appreciate how big $3.2 billion in infrastructure actually is. A few years ago, in another line of work, we built an arena in Milwaukee for our Bucs. Amazing arena. I'm a little biased, but my view is it's the best in the league. That was a total of $525 million in capex. It took us about two and a half years to build. What we're doing here at NFE is equivalent of building and delivering six of these arenas at the same time in countries throughout the world. which if it sounds hard, it's because it's plenty hard. It's hard to identify markets. It's hard to get a commercial foothold and get in business, and it's very hard to fund, and then, of course, it's hard to execute. That said, nothing that we're doing here is unproven or dangerous or experimental. In some form, it's all been done before, and in many cases, many, many times around the world, which is what makes it doing it at the same time both reasonable and feasible if you're organized and dedicated, which we are. These are big construction projects, so there's things to talk about every day, and we do, but are all on track, and once they're done, will truly transform the company. They'll produce significant, reliable cash flows going forward, require very little capex, and so thus the cash flow, much of it will go straight to the bottom line and deleverage and reduce debt of the company, and it's now a very straight shot for us to become an investment-grade company in the not-so-distant future. New markets with major avenues to grow, essential infrastructure at exactly the right time. So page number five. These are a list of the projects. So there's FLNG-1, which Chris Gintz will talk about, the liquefier, which is in the process of being deployed as we speak. It's materially complete. Puerto Rico Power, half of which is operational. The other half will be operational in the next few weeks that Brandon will talk about. Bacarena and Satacan Arena are two terminals in Brazil that Andrew Didi will talk about, and La Paz Power Plant, the 135-megawatt plant that is being commissioned as we go right now. $3.2 billion of infrastructure being converted from construction to revenue producing, which has a significant impact on the company. Page six is perhaps my favorite page of the entire presentation because it shows the history of the company. What you see here on this page is the number of terminals in yellow going from one in 2016 to three in 2020 to five here in 2023 and seven in 2024. The capacity that each one of those has is then listed below. Just as a point of reference, we showed 20 TBTUs. One million tons of LNG is 50. So this was, we started our business in Montego Bay with basically 40% of one ton of capacity. We have grown that materially as these different markets have come online to 620 TBTUs of capacity today, 920 next year. As you'd expect, LNG volumes then through these terminals then follow. So eight TBTUs in 2017, 74 in 2021, 136 this year, 185 and substantial growth beyond that going forward. And then lastly, of course, you'd expect that to convert to EBITDA. When you look at the bottom line, it's truly a remarkable progression of EBITDA. From losing money as we're developing assets, obviously, to a place where we're essentially breaking even in 2020, to one which has gone from $33 million in 2020, $605 million in 2021, About $1.1 billion in 2022, $1.6 billion this year, $2.4 billion to follow. So truly a remarkable, remarkable path. With that, let me turn it over to Chris to talk about our LNG-1.