Excelerate Energy Inc (EE) Q2 2024 Earnings Call Highlights: Strong Financial Performance and ...
Adjusted EBITDA: $89 million for Q2 2024, up $14 million or 18% from the previous quarter.
Maintenance CapEx: $21 million for Q2 2024; $32 million year-to-date through Q2.
Total Debt: $734 million, including finance leases.
Cash and Cash Equivalents: $609 million at the end of Q2 2024.
Revolving Credit Facility: $350 million capacity available for borrowings at quarter end.
Share Repurchase Program: 674,000 shares repurchased for $11 million at an average price of $16.27 per share in Q2 2024; 40% of the $50 million program utilized.
2024 Adjusted EBITDA Guidance: Raised to $320 million - $340 million.
2024 Maintenance CapEx Guidance: Expected to range between $50 million and $60 million.
2024 Committed Growth Capital Guidance: Expected to range between $70 million and $80 million.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Excelerate Energy Inc (NYSE:EE) reported strong financial results with an adjusted EBITDA of $89 million for the second quarter, marking an 18% increase from the previous quarter.
The company is advancing its strategic growth initiatives, including the development of a newbuild FSRU, Hull 3407, which is on schedule for delivery in June 2026.
Excelerate Energy Inc (NYSE:EE) is expanding its global footprint with strategic investments, such as entering the Vietnamese energy market and developing an LNG import terminal in Haiphong, Vietnam.
The company is integrating modular reliquefaction kits on its vessels to improve operational efficiency and prevent LNG cargo volume loss, enhancing service value for customers.
Excelerate Energy Inc (NYSE:EE) has a robust balance sheet with $609 million in cash and cash equivalents, and a $350 million revolving credit facility, providing ample liquidity for growth and strategic objectives.
Negative Points
The political situation in Bangladesh poses potential risks, as the recent resignation of the Prime Minister and the formation of a caretaker government could impact operations and project timelines.
The Cook Inlet project in Alaska faces technical challenges due to extreme tidal ranges, requiring suitable technical solutions to ensure reliability.
The company has significant capital commitments, with maintenance CapEx expected to range between $50 million and $60 million, and committed growth capital between $70 million and $80 million for the year.
There is uncertainty regarding the timeline and cost estimates for the Alaska project, with concerns about the high cost of an FSRU solution.
The integration of reliquefaction technology on vessels has a lead time of about 18 months, and financial benefits depend on customer agreements, which may require renegotiation.
Q & A Highlights
Q: Regarding the Alaska proposal, have you addressed the concerns about extreme tidal ranges in Cook Inlet and proposed a technical solution? A: Steven Kobos, CEO, stated that Excelerate Energy is aware of the conditions in Cook Inlet and has experience dealing with challenging environments globally. David Liner, COO, added that they are confident in developing a technical solution, as similar facilities exist in the area, and they have a strong engineering team to tackle such challenges.
Q: Can you provide more details on the Northern Vietnam onshore terminal project and its potential economics? A: Oliver Simpson, Chief Commercial Officer, explained that Excelerate Energy has been exploring Vietnam for a while due to its strong LNG prospects. The project is based on existing industrial demand, making it the first LNG terminal in the region. The company is focused on delivering integrated solutions and sees this project as a model for similar opportunities in emerging markets.
Q: With visible growth ahead, how does Excelerate Energy balance growth, shareholder returns, and liquidity? A: Dana Armstrong, CFO, emphasized that growth is a priority, with investments in fleet maintenance and new projects like Hull 3407. The company will maintain its dividend and continue its share repurchase program opportunistically, ensuring a balance between growth and shareholder returns.
Q: What are the vessel requirements for projects like Alaska, and how does Excelerate Energy plan to grow its fleet? A: Steven Kobos, CEO, mentioned that vessel requirements vary by project, with some needing new builds and others suitable for conversions. The company intends to grow its fleet strategically, tailoring vessels to project needs and evaluating different ways to expand.
Q: How does Excelerate Energy view the balance between organic investments and M&A? A: Steven Kobos, CEO, stated that the company is agnostic about how opportunities are served, focusing on projects with strong fundamentals. They aim to be a critical part of the energy transition, opening markets for LNG and fitting into the global value chain, whether through organic growth or M&A.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.