Excelerate Energy, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; balance-sheet comparisons are to December 31, 2023. The company provides LNG regasification, FSRU and terminal services, and LNG and natural gas sales. Results are unaudited.
Financial performance
| Metric | Q1 2024 | Q1 2023 | Change |
|---|---|---|---|
| Revenue | $200.1 million | $211.1 million | Down $10.9 million (5.2%) |
| Operating income | $45.2 million | $49.6 million | Down $4.4 million |
| Net income | $28.1 million | $30.7 million | Down $2.6 million |
| Net income attributable to shareholders | $6.3 million; $0.24 per diluted share | $6.8 million; $0.26 per diluted share | Down $0.5 million |
| Adjusted EBITDA (non-GAAP) | $75.4 million | $79.9 million | Down $4.5 million |
| Adjusted Gross Margin (non-GAAP) | $89.6 million | $97.1 million | Down $7.5 million |
| Operating cash flow | $64.7 million | $46.8 million | Up $17.9 million |
| Capital expenditures | $12.8 million | $14.9 million | Down $2.2 million |
FSRU and terminal services revenue rose to $157.0 million from $118.6 million, while gas sales revenue fell to $43.1 million from $92.5 million. Operating margin was approximately 22.6%, compared with 23.5% a year earlier; gross margin was approximately 33.3%, compared with 34.1%.
Liquidity, debt and capital
- Cash and cash equivalents were $578.9 million; total cash, cash equivalents and restricted cash were $596.7 million at March 31, 2024.
- Current assets were $693.6 million and current liabilities were $196.9 million. The filing states management expects sufficient liquidity for the next 12 months, including operations, planned capital expenditures, debt service, taxes and announced and expected dividends.
- External debt was $373.6 million gross, or $366.9 million net of issuance costs; related-party debt was $177.8 million gross, or $169.4 million net. Finance lease liabilities totaled $206.9 million. These categories are reported separately in the filing.
- The $350 million EE Revolver had $40 million of letters of credit outstanding and $310 million of undrawn capacity available. The company reported compliance with debt covenants.
- Operating cash flow less capital expenditures was $51.9 million. Financing cash outflows included $8.4 million of share repurchases, debt repayments, finance lease principal payments and dividends.
- A $50 million Class A share repurchase program was authorized in February 2024. The company repurchased 588,030 shares at a weighted average $15.92 per share for approximately $9.4 million during the quarter; $40.6 million remained available under the program at March 31.
Material changes and management commentary
- Revenue and earnings declined year over year despite higher service revenue. Management attributed lower results mainly to drydocking of Summit LNG and Excellence, the transition of Sequoia to a time-charter agreement, and fewer other gas sales opportunities. Higher German charter revenue, rate increases, and other items partly offset these effects.
- Management said service revenue benefited from the Brazil time-charter agreement and a full quarter of the Germany charter. Lower gas sales reflected higher volumes and prices in Brazil and Finland in Q1 2023; Bangladesh LNG sales partly offset the decline in Q1 2024.
- Management described LNG spot prices as relatively low and steady through Q1 2024 and noted ongoing geopolitical uncertainty. It expects continued market interest in regions served, subject to pricing and demand conditions. The filing provides no specific full-year earnings or revenue guidance.
- The company operates ten FSRUs. Long-term time-charter and terminal-use contracts are generally take-or-pay in nature. It reported $7.874 billion of estimated fixed transaction price allocated to remaining performance obligations, including LNG sales to Petrobangla scheduled to begin in 2026 under a 15-year agreement.
- Future LNG purchase obligations were reported at $12.070 billion, valued using March 31, 2024 prices; supplier facility start-up and delivery timing affect these commitments. The company also expects approximately $330 million of payments for a new FSRU due for delivery in 2026, including approximately $50 million in 2024 and $250 million in 2025–2026.
- Risks highlighted include LNG market and commodity-price changes, operating and project execution risks, foreign-country and geopolitical exposure, permitting, financing and debt constraints, customer and supplier performance, and concentration of revenue among customers. Two customers accounted for 28% and 19% of Q1 2024 revenue.
- The company reported no material changes to previously disclosed risk factors other than new disclosure that dividends and repurchases are discretionary and may be constrained by debt agreements, law, liquidity and other factors. A $0.025 per-share dividend for Q1 was approved after quarter-end, payable June 6, 2024.
Important facts for investors to verify
- Whether drydock schedules, the Sequoia transition and changes in gas sales continue to affect quarterly earnings and cash flow.
- Availability and covenant capacity under the revolver, and the effect of future debt service, finance leases and large LNG purchase commitments on liquidity.
- Timing, pricing and supplier readiness for the Petrobangla and QatarEnergy arrangements, LNG supply obligations and the new FSRU project.
- Customer concentration, geographic and currency exposures, and the impact of geopolitical events or regulatory changes on operations and LNG markets.
- Whether dividends or share repurchases continue; neither future payments nor purchases are assured. The filing identifies Kaiser affiliates as controlling a majority of voting power.
- Adjusted EBITDA and Adjusted Gross Margin are non-GAAP measures; compare them with GAAP results and review the company’s definitions and reconciliations.