New Fortress Energy Inc.

Good day and welcome to the NFV first quarter 2025 earnings call. Today's conference is being recorded. At this time, I will be handing the call over to Matt Reinhardt, Managing Director for Introductory Remarks.

Good afternoon, everyone. Thank you for joining today's conference call where we will be discussing our first quarter 2025 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 on forward-looking statements and non-GAAP measures. With that, let me hand the call over to our Chairman and CEO, Wes Edens. Wes?

Great. Thanks, Matt. Welcome, everyone. So lots to go through here this afternoon, and I'll try and make my own statements brief. Start with the core earnings for the quarter. We're very much in line with expectation. If you look at the yellow boxes on the piece of paper, you can see that post the first quarter of 24, which is the last quarter that we had the FEMA plants online in Puerto Rico, we've had basically extremely consistent core earnings, 110, 177, but then 109, 116, so very much in line with that. Our forecast for the core earnings for the remainder of the year are basically very much in line with what this is for the first half. and then accelerating the second half as we start to bring assets online, in particular those assets in Brazil. That said, the EBITDA that we had forecast for the quarter were less than that simply because we did not have any one-off results to add to it. Again, if you look at our numbers historically, we've had a combination of core results plus one-off results, and we simply didn't have any one-off results this quarter. That said, we expect EBITDA plus gains to be $1.25 to $1.5 billion for the year, which is higher than our previous estimate. We're actually off to quite a good start in that regard, in particular when you consider the events of just today. We already had meaningful gains with our Jamaica sale, which I'll talk about in a second, and there's a handful of other things that are going to be significant events for us to add to our core events. But our goal is the quality versus quantity of the earnings, in particular what we are looking to generate for shareholders and for our constituents is repeatable, easy to understand, and very long duration cash flows. And I'll explain kind of what the portfolio looks like because we have a lot of those to offer. So let's flip the page to page number four. Material events that are in front of us. First and foremost is the Jamaica sale. $1.055 billion closed today, just a few hours ago. That translates into about $800 million in net proceeds, a $430 million gain. So, again, a good start at whacking at the one-off gains that we expect to generate for the course of the year. The FEMA claim is, as we originally had filed it with FEMA, $659 million. There's a very high degree of engagement with the Army Corps, which is our prime contractor, Weston, that is making a lot of progress, and we expect resolution of this claim at some point in the near term. As with any proceeding with the government, it's impossible to really forecast accurately either the time or the amount of that, but we remain optimistic about what our position is as we know what we are owed, and the $659 million reflects that. On the FSRU subcharters, We basically had a handful of FSRUs that were surplus to our needs in our portfolio that we basically took back and then re-let them at a higher rate to third parties. The Eskimo, the Freeze, and then there's two others that are in there. The total nominal dollars are shown in the line below. So $143 million in profit, $59 million, $110 at 312. They range in periods from anywhere from 3 to 10 years. The present value at a 10% discount rate, just to give context to it, is $236 million. So these are assets we can either collect month by month over the next three, five, ten years, or we can look to sell them and generate a one-time gain, something we're evaluating. Lastly, the excess cargo sale that we conducted at the end of last year and reported the result in the fourth quarter, which, again, if you look at the previous page, the excess cargo was $296 million. These were excess cargoes that we had. We were concerned that actually the market might decline for value. That turned out to be prophetic, because that's exactly what happened. We sold them, so really the gain from them was the one-time gain from last year. There's another $125 million to be collected, primarily in the periods of 26 and 27 and 27 and 28. So those are the big events for us. There's others as well, but hopefully this gives you some useful context in evaluating the $1.25 to $1.5 billion EBITDA or gain estimate that we're providing for the year. Page number five. So our near-term focus has been on asset sales, on debt reduction, and deleveraging. And the case study is the sale that we just concluded in Jamaica. If you look at the timeline below, you can see we listed the property for sale in the fourth quarter of 2024. We conducted our second round bid and wintered it down to five bidders in the first quarter. We chose to work with Accelerate exclusively in March, and we concluded the sale now. Basically, both the timing and the amount that we had forecasted, we've exceeded. So we did it in a shorter period of time and at a higher price than what we had originally forecasted, so we feel great about that. A little bit on Jamaica above it. This is the first market that we had started to conduct business in, and it is a great market. We ended up generating $125 million in EBITDA, a stable, mature market with long-term contracts with a 20-year duration. So a significant portion of them were supplying Jamaica's gas and power needs. So roughly 60% of the island's gas or power we supply. They still think there are significant remaining growth opportunities in Jamaica for bunkering and expansion. So we feel great about the asset that we sold on to Accelerate. But from our standpoint, this is a meaningful deleveraging event for us. So sale price of $1,055,000,000, $227 million in debt repayment on the direct Jamalco asset and the power plant, an estimated $50 million in fees, net proceeds of $778 million. Chris will talk about that later. Page number six, following the Jamaica sale, our goals are very, very clear. Number one, first and foremost, is to simplify the balance sheet and do so by extending the duration to match underlying assets and lower our debt costs. To do so, we are focused on moving from a corporate debt structure to one which is more asset-level financing, and we'll describe that in some detail. This is something we've had a lot of experience about before, and I think in many cases when you have a capital structure that becomes too complex or too difficult for people to interpret, the underlying asset value can become obscured by it, and you get kind of the worst of all worlds. And so what we're very focused on is isolating those assets that have the long duration, the credit quality, the repeatability that we know to make them the most valuable, expose those in a financing context, and generate the right result for that. So you look at page number seven. This is a good example of what I mean. Basically, what we have done is matched our long-term supply in our portfolio with our FLNG unit, which is performing terrifically, and then two long-term contracts with Venture Global and match them up side by side with those contracts that are a long-term demand. So I've listed the five that are the most notable. There are smaller ones as well, but these are the ones that are the most meaningful. And basically you can see on the supply side, we have 215 TBTUs of supply for a term of 20 years. On the demand side, this handful of the large contracts is for 20 years as well on average, and it ranges from BBB, BBB+, BBB-, single B+, in the one case, but they're generally high credit quality assets, very long-term duration, and these are their stated contract terms. And simply subtracting the cost of supply from the value of the demand, you can see these assets alone generate $500 million in annual margin. These are not assets that we are aspirational about building or assets that we are talking about pursuing or whatever. This really represents the core of the portfolio. And the way I think of it is, We're utilizing about 50% of our total supply portfolio, so of the 215, this is committed on the 109 TBTs of it. And if we're able to replicate our activities on the second half of this, a term similar to the first half, we can generate $500 million that grows to a billion dollars annual margin with very, very long duration. And with that, that presents tremendous financing opportunities. It also presents great value to shareholders, and that's what our focus is. Page number eight is that in order to close the loop and finance this efficiently, you need to control every aspect of the logistics chain, supply, demand, terminal, ships, and overall logistics. Fortunately, we control all that. So the four terminals that are relevant in this discussion is the La Paz Terminal in Mexico, Puerto Sandino in Nicaragua, the Bacarena Terminal in Brazil, and the San Juan Terminal in San Juan, Puerto Rico. We have these terminals that we own and control, essentially, and have developed. In addition, we have a dedicated fleet of terminal ships and transport ships to basically both supply to the locations, but then also supply then onto the land. So basically you've connected the dots between every aspect of it. And so the combination of the long-term cash flows, credit quality, duration, in particular this, the 20-year duration, is what actually gives us so much optimism that there's meaningful things to do here. There's a reason why Charlie Munger used to carry around the compounding tables in his back pocket. You know, 20 years of repeatable cash flows is an incredibly powerful combination, and that's what we have already in hand, and we think the prospects for adding to it are terrific. So on the growth side, two elements that we're focused on is Brazil and Puerto Rico, and I'm joined here in New York by Leandra and Jeremy from our Brazil team who run Brazil Forest, and they can give some context both on what we have accomplished and what we're focused on. Fellas?