New Fortress Energy Inc.

Good day and welcome to the NFE second quarter 2024 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Chance Pipitone. Please go ahead.

Thank you, Samara, and good morning, everyone. Thank you for joining today's conference call, where we will discuss our second quarter 2024 results. The call is being recorded and will be available by replay on the Investors section of our website under the subheading Events and Presentations. At the same location, you'll find a presentation that we will walk through on today's call. Please review this as it includes important information, including disclosures and risk factors. With that, I'll now hand over the call to our Chairman and CEO, Wes Edens. Great. Thanks, Chance, and welcome, everybody.

Please refer to the slide deck that we posted on our website as well as on this call. We'll be referring to that, but we have a lot to run through here. I look forward to catching up. So let's start with numbers on page three. Our earnings for the quarter were $120 million in EBITDA. That was well below our quarterly goal of $275 million, with a miss of $155 million. The miss was entirely a result of the delay in the deployment of our first FLNG-1 asset. Our goal was to bring this online in April of this year, and for a variety of reasons, we missed this by several months. That's the bad news. The good news is we did bring it online last month on July 19th, and it's been performing very well since then. This is an incredibly valuable project, and bringing it online in the timeline we achieved is a major accomplishment. It's a $2 billion-plus investment, and today's market generates $500 million a year in free cash flow, so it's highly profitable and has a big impact on the business. But as a result of the impact of the delay of even a few months' material, it had a big impact on the quarter that recently concluded. As I said, the good news is the project is up and running and it's been performing well. We performed our first transfer of a partial cargo early this morning. We'll now shut down the unit for approximately a week for planned maintenance and then fire back up and expect to achieve full production levels shortly thereafter. This then becomes a cornerstone asset for our company. Flip to page four, please. Page four, this is a bit of a recap of our past, present, and future financial results are shown here. In 2023, we made $1.3 billion. In the first quarter of 2024, we made $340 million. That was the last quarter that we had any of the residual impacts of the FEMA contracts. It was a good quarter for us. The one that recently concluded, $120 million. Our goal and forecast is for $275 million a quarter for the remainder of the year. Q3 will also be impacted by the delay as we've got this online in July. We don't expect to get full production of this until the 1st of September, and thus it'll be somewhat reduced from the 275 goal. And then Q4 is a full quarters production of $275 million. The FEMA claim that we'll talk about in just a few minutes with Brandon will bring this up to total EBITDA expectations for the year. with a range of $1.4 to $1.5 billion. Guidance for next year is $1.3 billion. Basically, that is just the existing volumes and customers plus the addition of our Nicaragua and Brazilian assets. At this point, over 90% of our expected revenues are contracted, so we feel very confident about achieving these results and feel that there is room for significant upside, given that we're only about halfway through 2024. In addition, with the remainder of our Brazil contracts coming online in mid-2026, We expect this $1.3 billion to grow materially, which Andrew and Dede will go through in just a moment. Turning to page five. Our broadly diversified business is now very easy to model and understand, and here's the math for next year. Our total supply at this point is approximately 170 TBTUs. 50 TBTUs equals one ton of LNG, so we have a current supply in our portfolio of approximately 3.5 million tons for next year. The five countries shown in the net margins are weighted average of our various customer contracts. They range between the countries from $4.50 to $8 in margin. In general, this is a function of the proportion of the capital we invested in order to achieve these results. In simple terms, in those markets of the largest investment, in particular Brazil and Puerto Rico, our margins are the highest. The weighted net average is approximately $7. Multiply 7 times 170. gives you approximately $1.2 billion. At $109 million for ship operating margin, you get to our forecasted profit of $1.3 billion. Obviously, to the extent we sell more gas or more power, these numbers go up. We've invested approximately $8 billion to create this portfolio of gas and ships and power plants and terminals, and that investment is now behind us, and thus our goal is to grow organically from here with little or no additional CapEx. The deployment of the FLNG asset represents a watershed event for us with respect to our investment activities, And now we are singularly focused on organic earnings and free cash flow. Page six is a simple page which shows you arithmetic behind the FLNG-1 project at current market levels. You can just follow along the top. Total capacity of the unit is 1.4 million tons, which is 70 dbtu. Cost of LNG produced today is Henry Hub plus $2.50, or about $4.50 in total. The average margin of our business, as I said, is $7. Seven times 70 equals 490. Using our own facility and ships greatly reduces our logistics costs by $100 million, which then adds up to $599 million, or roughly $150 million a quarter. It's a pretty simple map. Click to page seven. Operationally, we had a terrific quarter, highlighted by the FLNG-1 put into service. First cargo was actually transferred early this morning. Planned maintenance starts tonight for seven days, and we expect full production shortly thereafter. Completion of FLNG 1 triggered the FLNG 2 financing, which is entire equity finance and requires no additional equity capital from us. The Brazilian terminals are complete. There's a beehive of great activity that I'll leave to Andrew to go through. Nicaragua is also nearly complete, and I'll run through that in just a second. So if you flip over to page number 8, well, let's talk about Nicaragua. This is on the left-hand side is a picture of the power plant that we have built that is 100% completed. It's a 300-megawatt power plant. I think it's the first new modern power plant built in the country in the last 30 years. It is ready for operations. Five miles away, there's a jetty that the FSU will be moored at. That jetty is 95% complete, as you can see from the picture here, waiting for the ship to show up. The last bit of kit to be installed is the five-mile pipeline. All those construction materials were delivered in the last couple of weeks, and they're ready to be installed. We expect that to be completed in September and begin operations thereafter. Our power plant is also located next to the IDB line, which allows us to then export power from Nicaragua to neighboring countries. So we feel like this is not just a Nicaragua terminal, but actually a Central American terminal. We think that there's a significant amount of activity that will come as a result of that. With that, let me turn it over to Andrew.