Excelerate Energy Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 8, 2025
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Operator

I'll now hand it over to your host, Craig Hicks, Vice President, Investor Relations and Strategy. Please go ahead.

Craig Hicks
Craig Hicks
Vice President of Investor Relations & Strategy at Excelerate Energy

Good morning, everyone. Thank you for joining Accelerate Energy's first quarter twenty twenty five earnings call. Participating on the call today are Stephen Kobos, Chief Executive Officer and Dana Armstrong, Chief Financial Officer. Also joining the call today are Oliver Simpson, Chief Commercial Officer and David Leiner, Chief Operating Officer. Our first quarter twenty twenty five earnings results press release and presentation were released yesterday afternoon and can be found on our website at ir.accelerateenergy.com.

Craig Hicks
Craig Hicks
Vice President of Investor Relations & Strategy at Excelerate Energy

I would like to remind everyone that we will be making forward looking statements on this call that involve a number of risks and uncertainties. Our actual results may differ materially from those expressed in these forward looking statements, and we make no obligation to update or revise them. Today's remarks will also refer to certain non GAAP financial measures. We have provided a reconciliation to the most directly comparable GAAP financial measures at the back of the presentation. With that, it is my pleasure to pass the call over to Steven Kobos.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Thanks, Craig,

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

and good morning, everyone. It is truly a pleasure to have you on the call with us today. Accelerate is off to a great start in '25, and we continue to make progress on our strategic objectives. I know that many of you may be familiar with Accelerate. I also know that Accelerate is attracting the attention of a lot of new investors with our recent activities.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

So for the new ears on the call and eyes on the deck, I wanna touch on who we are as a company. Accelerate Energy is the global leader in floating LNG import terminals and downstream LNG infrastructure. We operate 10 FSRUs, which represents approximately 25% of the world's floating regasification capacity, and we have another FSRU under construction. We are an experienced operator, and we are expanding our LNG terminal presence in key natural gas markets around the world. As a U.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

S. Company with a global presence, we help countries enhance their energy security while supporting the transition to a lower carbon future. So what sets Accelerate apart from an investment perspective? First, our business is predominantly supported by take or pay contracts. These give us the ability to generate sustainable earnings regardless of economic cycles.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Second, we have a strong balance sheet that provides us with financial flexibility to execute our growth strategy. And third, by focusing on the last mile of the LNG value chain, we are strategically positioned to scale our business as new LNG supply arrives online in the coming years. With these attributes as a foundation, Accelerate is a great investment opportunity. On today's call, I'll go over several key highlights from the quarter and give an update on our strategy. Then I'll hand the call over to Dana who will discuss our financial results in more detail.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Q1 was another strong quarter for Accelerate. We delivered $100,000,000 of adjusted EBITDA and $56,000,000 of adjusted net income. The financial results we achieved this quarter were driven primarily by the strong performance of our core regasification infrastructure business. I touched on this earlier, but I have to emphasize our FSRU and terminals business is underpinned by a high quality take or pay customer contract portfolio. This year, that portfolio represents over 90% of our estimated full year adjusted EBITDA.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

The steady cash flows this business generates gives us a strong financial base and is the cornerstone of everything we do. Let's talk operations for a moment. On the operations front, our teams continue to make operational excellence a top priority. We have an unwavering commitment to achieving high levels of reliability that helps us protect our revenue and consistently meet our customer commitments. During the quarter, our team continued to see operational reliability above 99.9%.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

This is simply outstanding. We exceeded all our primary safety targets as well. This reaffirms our commitment to safe and sustainable operations. In short, we have a great base business with best in class operations. Now let's turn to our growth strategy.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Since last quarter, the Accelerate team has done a great job generating near term value creation for our shareholders. We continue to advance our fleet asset optimization and expansion strategy. The construction of Hole 3407 remains on track for expected delivery in mid-twenty twenty six. We continue to see great demand for Hole 3407 and we are in ongoing discussions with potential customers regarding the vessel's deployment. The next construction milestone will occur in June when we launch or float the asset for the first time.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Beyond ensuring robust support for our core Regas business, we are pursuing strategic growth catalysts. Obviously, this includes our recently announced agreement to acquire an integrated LNG infrastructure and power platform in Jamaica. So let's talk a bit about our plans for Jamaica. In March, we announced that we entered a definitive agreement to acquire the fully integrated downstream LNG and power platform in Jamaica for a cash purchase price of approximately 1,000,000,000 Under the terms of the agreement, Accelerate will acquire the assets and operations of the Montego Bay LNG Terminal, the Old Harbour LNG Terminal and the Clarendon CHP power plant. These assets constitute Jamaica's sole LNG platform encompassing its only two LNG terminals and the island's only combined heat and power plant.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

This acquisition marks an important milestone for Accelerate in the execution of our downstream growth strategy. But most of all, it is an outstanding strategic and financial fit. Strategically, it aligns with our goal of investing in both LNG import terminals and complementary downstream infrastructure. It also enhances our aggregate long term contract revenue and margins while diversifying our geographic exposure and customer base. Lastly, the integration of this downstream and last mile infrastructure will secure accretive offtake that dovetails nicely with the venture global volumes in our LNG portfolio.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

In short, it is a big step forward. Beyond the strategic benefits, the addition of the Jamaica business will deliver significant near term value to Accelerate and our shareholders. First, the transaction will be immediately accretive to EPS and significantly enhance our operating cash flow. Second, it provides us with a contract portfolio of mostly investment grade counterparties, including Jamaica Public Service Company, which is one of the largest customers on the island. In fact, on an enterprise level, it pulls our aggregate off type profile to investment grade.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Third, it will enhance our operational and financial profile. And finally, the acquisition is going to provide us with a new pipeline of growth opportunities in both Jamaica and the Atlantic Basin. This is a great business and these are fantastic assets. We are excited to bring it into our portfolio and welcome the talented team of experts and professionals who have helped shape the LNG landscape in Jamaica. We are making good progress on integration planning and are on track to close this quarter.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

We are committed to working with the Jamaican government to ensure the transition is as seamless as possible. In summary, I am pleased with where Accelerate is positioned today and we are excited about the opportunities that lie ahead. With that, I'll turn the call over to Dana.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

Thanks, Stephen, and good morning. Accelerate delivered strong financial results for the first quarter. We reported adjusted net income of $56,000,000 which is a sequential increase of $10,000,000 or up 20% as compared to the fourth quarter of last year. Adjusted EBITDA for the first quarter was $100,000,000 up $9,000,000 or up about 10% versus the prior quarter. The sequential increases in both adjusted net income and adjusted EBITDA over the fourth quarter of last year were primarily driven by the timing of vessel operating and maintenance activities as well as lower SG and A expenses.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

In comparison to the first quarter of last year, the increase in adjusted net income and adjusted EBITDA was due to the dry docking of the FSRU Summit LNG in the first quarter of twenty twenty four and an increase in direct gas sales margin. Now let's turn to our balance sheet. For the three months ended March 31, our total debt including finance leases was $677,000,000 and we had $619,000,000 of cash and cash equivalents on hand. As of March 31, '3 '50 million of undrawn capacity under our revolver was available for additional borrowings. In April, Accelerate entered into an amendment to its senior secured revolving credit facility.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

The amendment extends the maturity of the revolving credit facility from March 2027 to March 2029 and increases its total capacity available for borrowing from $350,000,000 to 500,000,000 The amendment is contingent on the closing of the previously announced pending acquisition of the Jamaica business and the repayment in full of the existing term loan under the credit agreement. Also in April, Fitch Ratings and S and P Global Ratings issued inaugural credit ratings for Accelerate Energy. S and P has assigned an issuer and issuance rating of BB plus to the company, while Fitch assigned an issuer and issuance rating of BB. We are proud of our inaugural credit ratings. This achievement reflects our strong financial health and the stability of our take or pay business model.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

Now let's turn to a recap of our recent capital markets activity. We are pleased to announce that we have completed the equity and debt financing for our previously announced acquisition of the business in Jamaica. Early in the second quarter, we completed an equity offering of 8,000,000 shares of Class A common stock at a price per share of $26.5 for $212,000,000 of gross proceeds inclusive of the green shoe. Additionally, on May 5, we closed on our $800,000,000 offering of 8% senior unsecured notes due in 02/1930. The equity and debt proceeds will be used to fund the Jamaica acquisition and to pay down the term loan under the credit facility.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

Now let's turn to an update on our financial guidance for 2025. Based on our first quarter results, we are increasing our previously communicated adjusted EBITDA guidance range for 2025. This guidance range does not yet reflect any incremental EBITDA from the Jamaica acquisition. For the full year, we now expect adjusted EBITDA to range between $345,000,000 and $365,000,000 Excluding any additional capital expenditures related to the pending Jamaica acquisition, we reaffirm our previously announced guidance of maintenance CapEx and committed growth capital for 2025, which are expected to range between $60,000,000 and $70,000,000 and $65,000,000 and $75,000,000 respectively. As a reminder, most of the committed growth capital this year is related to the milestone payments on our new build FSRU Hull 3,407.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

We made a roughly $30,000,000 milestone payment related to the keel laying of Hull 3,407 in the first quarter. The next milestone payment of roughly $20,000,000 will be made in late Q2 following the launch of the vessel. We will continue to provide updates on our committed growth capital estimates as contracts are executed with counterparties that drive incremental capital needs for 2025. With that, we'll open up the call for Q and A.

Operator

Thank you. Our first question for today comes from Theresa Chen of Barclays. Your line is now open. Please go ahead. Sorry, Theresa, your line is now open.

Operator

Please go ahead.

Theresa Chen
Theresa Chen
Senior Analyst at Barclays

Sorry, can you hear me now?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Yes, we can.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Good morning.

Theresa Chen
Theresa Chen
Senior Analyst at Barclays

You for taking my questions. Good morning. On Jamaica, a two part question. Can you remind us what are the remaining steps to close the transaction at this point given the target timeline of this quarter and less than two months left?

Theresa Chen
Theresa Chen
Senior Analyst at Barclays

And then in terms of your growth endeavors for these assets, you've outlined a variety of potential paths to growth. And now that we've had a bit of time to digest the news and taking into account the evolving macro backdrop of both supply of LNG and demand for gas, what are you what do you think are some of the lower hanging fruit in projects and what kind of EBITDA can they bring?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Thanks. Thanks, Theresa. I appreciate all four questions, and good morning. This is Steven. In terms of, closing, you know, we're well into this.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Obviously, we were, you know, we did our due diligence earlier in the spring, before we closed before we signed in March. These are just a series of, you know, I don't wanna say anything's routine, but just routine deliverables, consents. You know? So I don't I don't see any major impediments there. We have confidence seller will make good on those deliverables.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

So that's why we're comfortable just expressing the confidence that you heard earlier. In terms of in terms of macro, you know, I'll just make a couple of comments and hand it over to Oliver and see if he wants to amplify. What we like about the Jamaica platform in particular is it it does look like there are some, you know, lower hanging opportunities there. And there are also some opportunities that, you know, compared with the scale of what we've talked about before, you know, there's some generally good opportunities that are of modest CapEx. You know?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

So we see that as being a incremental driver on why we like this this deal. But I'll let Oliver expand upon that if you would.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

Thanks, Steven. Thanks, Theresa. So, yeah, I I think for for us, it's really you know, the focus is on on getting to close, and I think, post close, you'll see us kinda communicate more on the, on the growth strategy in Jamaica. But really, you know, the the way we see it is these are, you know, these these are some great assets that we're acquiring, on the island and there's, you know, they create an immediate platform for growth. They are, you know, we just through those assets, we can do incremental gas and LNG sales, which is what we'll be looking to capitalize on upon completion.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

I also think, you know, Jamaica, just from its geographical location, you know, we've talked about the sort of hub and spoke model. It's a fantastic hub to, you know, and creates a platform to grow on in the region and look at other, you know, other projects and other markets around there using using these assets as as the base for that. So so, yeah, we're we're extremely we're extremely excited about the the platform this creates for us. But as I said, we we'll get this to close, then we'll look to come and communicate more details on this with you guys.

Theresa Chen
Theresa Chen
Senior Analyst at Barclays

Thank you for humoring me. My first question, parts a through d. Second question on the new build, Hull 3407, would you mind providing an update on the latest prospects in terms of finding a home for this asset as well as gas supply? How are market dynamics evolving, for the potential economics that a new built FSRU of this size, scale and specificity can command?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Theresa, I'll take that one just because I'm going to be careful about it because I welcome all our investors on the call, but those ain't the only people listening in, on what our plans are. So I'll just say that, we are excited about it. It is it takes all of the lessons that we've learned over the past twenty three years and applies to it. It's gonna have best in class boil off, you know, just all kinds, economically is huge. But we are talking.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

We're in serious discussions on multiple fronts, at this point, and people want it for all kinds of ways. You know? And we will not be hidebound and insist that that come with LNG supply. It might with certain of the counterparties we're talking to. It might not with some others.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

So we are, leaving everything on the table as we always do. We don't like to limit ourselves in terms of the opportunity set on this massive TAM. So I I don't think I can say more without prejudicing, our ability to continue in those discussions. So I'll leave it at that, that there's, intense interest. It's going to be the best asset afloat, and, we're excited and can't wait to bring it home.

Theresa Chen
Theresa Chen
Senior Analyst at Barclays

Thank you so much.

Operator

Thank you. Our next question comes from Chris Robertson of Deutsche Bank. Your line is now open. Please go ahead.

Christopher Robertson
Christopher Robertson
Equity Research Analyst - Vice President at Deutsche Bank

You, operator. Good morning, everybody. Thank you for taking my questions. Stephen, I just wanted to circle back on your comment related to the Ventra global volumes, which I guess for Phase two Plaquemines are expected by 3Q twenty twenty seven. So could you just walk us through the available supply volumes that would be available upon closing of the transaction, presumably from 2Q this year through 3Q twenty twenty seven?

Christopher Robertson
Christopher Robertson
Equity Research Analyst - Vice President at Deutsche Bank

What does that look like? And then does it create a situation wherein then your long LNG supply once the BG volumes come into play? Or how should we think about that?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Good morning, Chris. Thanks for joining us. It's always good to hear from you. I'm going to hand it to Oliver in a second. I would say, obviously, in terms of how the VG Plaquemines expansion volumes dovetail they dovetail, you know, long term perfectly.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

We're looking at twenty, twenty one years contracts and extensions on the island. That base needs about point six. And as you know, MTPA and as you know, VG for us over almost the exact same length of time is point seven. In the LNG world, that's almost a perfect match. We do we are getting, we are getting a third party non NFE supply, for some interim period of time.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

But, Oliver, you're gonna have to help me out in terms of but we haven't closed yet, so obviously, I don't want to wrong foot anything here. But you might talk to about that overlay if you would, please.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

Yeah. I I think we haven't we haven't given specifics on on the timeline, but, you know, as you mentioned, Chris, our our BG volumes are coming out in sort of '27. You know, is there is some there is some overlap between what what what we'll be inheriting with the the NFE transaction and those. I think that is obviously, we had these VG volumes prior to the Jamaica transaction, so we were we were gonna manage those within the portfolio and I think that's that that continues to be the plan. But as Steven alluded to, I think longer term, I I think we see the the tenure and and the size of the the size of the volumes as a a good fit for Jamaica and and that potential growth there.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Yeah. I think I think the one thing Okay.

Christopher Robertson
Christopher Robertson
Equity Research Analyst - Vice President at Deutsche Bank

That makes

Christopher Robertson
Christopher Robertson
Equity Research Analyst - Vice President at Deutsche Bank

makes sense.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Chris, it it is worth saying, you know, nothing's changed about how we view commodities. I think we are almost alone in this space and that we try to be agnostic as to the price of commodities. We try to lock in fixed margins. We like to buy and sell in the same basin. And what I can assure you is we'll bring that same philosophy, that we always bring to all of this.

Christopher Robertson
Christopher Robertson
Equity Research Analyst - Vice President at Deutsche Bank

Okay. Yeah. Makes sense. Follow-up question for me. This is more of a diving into kind of the hub and spoke type of model you've you've talked about a bit here.

Christopher Robertson
Christopher Robertson
Equity Research Analyst - Vice President at Deutsche Bank

But as you kind of look at the landscape of, countries, especially in The Caribbean here who are pursuing, renewables, solar, wind, some intermittent type of power, wherein they may need the flexibility of LNG imports to have at least a baseload backup system that runs on natural gas. Is there an opportunity, you think, with the Jamaica asset as the base there to, you know, pursue maybe a little bit more flexible terminals that are smaller scale and seasonal in nature much like you have in in Argentina or the or North West Gateway? Just some something in that realm.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Yeah. Chris, what I I love the question because you're going to the heart of why Accelerate is a good partner for the scaling of renewables. You know, the the poster child for that for us is our valuable partner customer Petrobras in Brazil. And as you know, Brazil's gosh. Their hydroelectric power generation part of the mix is 80%.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

You know? And then when you add their solar and wind, it's another 10% at times. So but you can't you cannot be that dependent upon intermittency unless you've got that gas fired power backup. So I think that's going to be that's not just true of someone who's done a fantastic job of scaling renewable power generation like Brazil. It's going to be true of anyone who wants to, you know, to be able to rely upon renewables.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

It has to be it has to be reliable. It's also you know, you will have seen chancellor Mertz. His government was just sworn in a couple of days ago. Think it's why I think it's why chancellor Mertz was so keen to announce the amount of gas fired power generation that Germany is going to be adding because it doesn't matter what your base load is. If it's hydroelectric or wind, you still need a reliable backup to it.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

So on a different scale, that same phenomenon is going to be apparent for anyone with these ambitions.

Christopher Robertson
Christopher Robertson
Equity Research Analyst - Vice President at Deutsche Bank

Thanks, Stephen. I'll turn it over.

Operator

Thank you. Our next question comes from Bobby Brooks of Northland Capital Markets.

Bobby Brooks
Vice President, Senior Equity Research Analyst at Northland Capital Markets

First one for me is, I was just curious what's dry gas sales up over a hundred over a hundred million two quarters in a row now. I was kind of expecting that to kinda continue to be a smaller number. So I was just curious kinda what's what's driving that.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

Hey, Bobby. This is Dana. It's a couple of things. So we've spoken previously about our Atlantic Basin deal that we that started in the fourth quarter and continued in the first quarter. So that's part of that number.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

And then on top of that, we had three other cargoes, two into Asia and one into Europe. So it's it's really those four items that are driving that number. So we've seen we've seen good success there, and, you know, that's something that we expect to continue.

Bobby Brooks
Vice President, Senior Equity Research Analyst at Northland Capital Markets

I think Fair enough. Good. Helpful.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Was just gonna say, Bobby

Bobby Brooks
Vice President, Senior Equity Research Analyst at Northland Capital Markets

Fair enough. Oh, yeah. Mhmm.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Yeah. But once again, all those deals were locked in on a fixed basis. You know? We like them, but, you know, we're not swinging for the fences there. That's just an example where we follow our philosophy and lock in either fixed prices or lock in same same basin.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

Yeah. So good point. All all of those are back to back. That's as Steven said, that's our that's our business model.

Bobby Brooks
Vice President, Senior Equity Research Analyst at Northland Capital Markets

Got it. Really helpful color there. Thank you. And so, obviously, also, you guys have more dry powder now after raising some equity and increasing the revolver. So could you just kind of discuss and obviously, the opportunity set for growth in front of you is vast.

Bobby Brooks
Vice President, Senior Equity Research Analyst at Northland Capital Markets

So could you maybe just discuss the appetite for more growth CapEx this year after you finalize the Jamaican asset acquisitions?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

I'm going to hand it over to Dana, but you're exactly right, Bobby. We do have adequate dry powder for our growth ambitions. I'll let Dana, you want let's we might as well speak to capital allocation, how we're thinking about it. I mean, priority does remain that.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

Yeah. Priority remains growth. I mean, obviously, we're really excited about Jamaica. It's a big M and A acquisition, we're excited about it, but to Stephen's point we've still got plenty of capacity to fund additional growth, you know, we have our new build being delivered in 2026, that's $200,000,000 of CapEx that we'll use mid next year, so about a year from now. We obviously have our projects in Vietnam and other markets and so you know we're really pleased with where we landed, know it's kind of a tough bond market, so we're really excited with where we landed.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

If you look at our net leverage profile, you know on a pro form a basis, I think we're at like 2.5 and that's without Jamaica, so once you layer in Jamaica and add that EBITDA and that cash flow, we'll be well under 2.5 by the end of the year, so plenty of opportunity to fund additional growth. As far as where is the growth going to come from, I'll turn that over to Oliver.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

Yeah. I think we continue to look at the same pipeline obviously as we've been focused on Jamaica but there's a pipeline of opportunities that we've continued to focus on the side. We the fundamentals are good for that. We see the LNG suppliers coming online. We see that general interest.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

So, as Stephen spoke to with seeing interest on the newbuild, we're seeing a lot of interest in the market and we continue to be confident in these different growth opportunities we're looking at.

Bobby Brooks
Vice President, Senior Equity Research Analyst at Northland Capital Markets

Perfect. And then just last one for me, kind of a broader question. But being a U. S.-based LNG company, that's been a nice edge for you all. But now with all the tariff back and forth and some uncertainty, I think some people might first think that, that changes that dynamic of it being an edge.

Bobby Brooks
Vice President, Senior Equity Research Analyst at Northland Capital Markets

But I think that's not truly the case since you aren't an exporter of the actual molecule. So could you just discuss how U. S. International diplomacy has impacted or likely not impacted the forward growth opportunities for you guys?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Yeah. Thanks, Bobby. I'll take that one. This is Steven again. Look, short answer, in many ways, Accelerate's essentially tariff proof.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

That's the short answer. The reality is we're not building a lot of we're not building anything in The US that needs a lot of steel or aluminum. You know? So we're not sitting here like so many companies wrestling, you know, what's our EPC cost gonna be or anything like that. What we do is overseas, we open up the downstream part of the LNG TAM.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

So I don't see a lot of that impacting us at all. In terms of, support for Accelerate, we are seeing that many countries that do have a balance of trade deficit are in fact quite anxious to rebalance that deficit any way they can. And once you look around, I know you're dialing in from Minnesota, but Bobby, there's only so much corn that those countries can import, you know, or wheat that they can import. So the the only way they can quickly alter their balance of trade is is through something like LNG. So we think we're actually seeing a lot of countries anxious to import more LNG.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

And here's their pickle. If you don't have the import, the downstream infrastructure to do it, that tool is not available to you. So many people are waking up to the fact that they do need they do need the infrastructure that on this part of the value chain that we provide. So I I look for those tailwinds to to continue for some time. And, you know, we're gonna do the best to be a good partner with any of those markets and help them achieve their ambition.

Bobby Brooks
Vice President, Senior Equity Research Analyst at Northland Capital Markets

Very, very helpful answer. I appreciate the color and congrats on another good quarter. I'll return to the queue.

Operator

Thank you. Our next question comes from Wade Sukey of Capital One. Your line is now open. Please go ahead.

Wade Suki
Wade Suki
Equity Analyst at Capital One Financial

Good morning. Thank you, operator. Appreciate appreciate you all taking the questions. Just sort of dovetailing on Bobby's question. I mean, it sounds like the the anxiety, I guess, being felt by some of our trade partners is maybe perhaps pushing forward or accelerating.

Wade Suki
Wade Suki
Equity Analyst at Capital One Financial

I'm not I'm not intended accelerating some of the opportunities out there. Is that a fair way to think about it?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Good morning, Wade. Yeah. I do think that is a a fair way of thinking about it. And I suppose I'd like to just lean in on this in that yeah. There's there's tailwinds are out there, but this is a reminder.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

I'm well aware of, gosh, how many of our colleagues out there in the public company marketplace are giving two sets of guidance or, you know, just lowering guidance based upon tariffs. So I'm proud that our base business model is one where we can confidently say that it is not impacted by tariffs and this predictability of these take or pay earnings. You know, we have high confidence of continuing, and that's reflected in in Dana's comments raising the guidance on our base business. So if anything, you know, this testing environment has just showed just how robust and resilient our base business is. So thank you for letting me have that plug.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

And, yes, those tailwinds are are real and out there.

Wade Suki
Wade Suki
Equity Analyst at Capital One Financial

Great. Thank you. Appreciate that. And just switching gears a little bit, anything any updates on your LNG vessel kind of conversion plans here? Where where does that sort of fit in now with the with the Jamaica transaction coming coming up on close?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Yeah. I will wait. I'm gonna take that question as being one of can we walk and chew gum? We definitely can walk and chew gum, But I'm gonna toss that over to Oliver and David to some degree. I mean, we've been we've had a number of discussions, and we've been advancing our engineering substantially.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

So let them elaborate on that, please.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

Yeah. Hey, Wade. It's, Oliver here. But, yeah. So I think I think we're we're in discussions with, with a few people.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

We've identified some candidates. I think we're we're, you know, we're getting pretty close to doing something. It's still, you know, just to to to be clear, it's still very much in the plan, you know, to acquire an asset this year and and then to to to do the engineering and to plan around the conversion. So, you know, I think it's it's just going going through going through the steps, but but it's still very much on target for for for this year from our side. And, you know, I think that's that's probably where I'd leave it up for now.

David Liner
David Liner
Executive VP & COO at Excelerate Energy

Yeah. On the engineering side, that's progressing really well. We plan to wrap up the kind of initial phase of engineering here middle of the year, and that'll give us good insight into those long lead items and and, yeah, and, yeah, just help us get one one step further down the road. So all's on track.

Wade Suki
Wade Suki
Equity Analyst at Capital One Financial

Fantastic. Great. Well, thanks so much. I appreciate all taking my questions, and I guess I'll see you all in a couple of weeks.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Thanks, Wade. Look forward to it.

Operator

Thank you. Our next question comes from Michael Cialla of Stephens. Your line is now open. Please go ahead.

Michael Scialla
Managing Director at Stephens Inc

Good morning. Just wanted to see if you could provide any update on Vietnam and what you need to see there before that MOU can move to some sort of binding agreement?

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Thanks, Mike. I'm gonna I think Oliver's gonna weigh in there. We actually have two MOUs with two separate subsidiaries of PetroVietnam. I will say Petro Vietnam's the constant there. That is that's the game in town, and we are you know, we're striving to enhance that that trust and relationship and add value for for them in any way we can.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

I'll let I'll elaborate on it.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

Thanks thanks, Steven. Thanks thanks, Mike. Look, I think for us, we're just talking about the tariffs and the effect that has on some partners. Think in Vietnam, you've seen fairly publicly from the Vietnamese government. They've come out and talked about you know, LNG as one of one of those solutions to to their trade deficit.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

So I think there's there's an intense focus there from them on this. You know, we've been methodically sort of working our way through with our Vietnamese partners and then going through this and obviously, as Steven mentioned, we have these two MOUs with subsidiaries of of Petro Vietnam, PTSD, and PV gas. So a lot of ongoing discussions with them. We're seeing we're seeing the momentum there. You know, we're pushing pushing to get something over the line.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

You know, we'll come back when we can, but there's, you know, I think there's no definitive updates on this call, certainly, we really like the tailwinds there and hope to find some deal space.

Michael Scialla
Managing Director at Stephens Inc

Okay. Sounds good. I guess my second one is for Dana. Dana, you mentioned some of the timing issues that caused EBITDA to be a bit higher in the first quarter. You did increase the 2025 guidance a bit.

Michael Scialla
Managing Director at Stephens Inc

Can you give us any idea how maintenance and operations will impact EBITDA over the remainder of the year? Just kind of looking for some cadence, general cadence on EBITDA over the course of the year.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

Yeah. So as you know, we don't guide to the quarters, but what I can say is that we do have a tendency at times to see some lumpiness in our spend related to vessel OpEx or vessel repairs and maintenance and that just depends on our schedules and you know, what we're able to do quarter over quarter. And so some of that some of that overachievement that we saw in the first quarter was related to some of those costs pushing out later in the year, but some of that overachievement was real cost savings. So it's a combination of those things. We also had some lower SG and A costs in the first quarter which helped us which, you know, those have been banked for the year.

Dana Armstrong
Dana Armstrong
Executive VP & CFO at Excelerate Energy

But in terms of, you know, where we'll spend and what we'll spend on, I mean, we we still stand behind our full year guidance that we just pushed out and so we'll see some of that r and m catch up in over the course of q q two, q '3, and q four. And then as a reminder, we're still on track to do the die dry docks that we've talked about previously. Obviously, that's capital capital expenditures, those costs. That'll be in the third quarter for the exemplar and the fourth quarter for the explorer. And so we're still standing behind what we've said in our previous earnings calls on on those items.

Michael Scialla
Managing Director at Stephens Inc

Thank you. Sure.

Operator

Thank you. Our next question comes from Zach Van Everend of TPH. Your line is now open. Please go ahead.

Zack Van Everen
Director - Equity Research at TPH&Co

Hi, all. Thanks for taking my question. Just one for me. As we've seen international gas prices come down in the spot and the forward markets, Have you seen an uptick in demand, whether it's for gas sales or more people coming to the table on the new build just around some of the developing countries that generally have can afford more of the gas when it comes down in price? Just curious if you've seen a change in demand there.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Talk about long term and short term.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

Yes. Look, I think that's exactly right that I think a lot of these especially developing world of these markets, affordability of LNG is a critical part for them. With this LNG supply starting to come on this year in '26, '20 '7 through the end of the decade, that certainly provides them the comfort that LNG will be there for those projects. So I think we've definitely seen interest on the back of that and I think that goes to the point earlier, we always say we're agnostic to the price of LNG. Open up these markets and in many ways as the LNG prices return to sort of long term affordable levels, brings the buyers out of the woodwork.

Oliver Simpson
Oliver Simpson
Executive VP & Chief Commercial Officer at Excelerate Energy

So I think we're seeing that interest and I think people are seeing that within coming to the market within the next year or so, it's also translating into interest to do relatively fast track projects, which is what we're trying to look at.

Zack Van Everen
Director - Equity Research at TPH&Co

Perfect. Very helpful. I'll leave it there. Thanks, guys.

Operator

Thank you. At this time, we currently have no further questions. So I'll hand back to CEO, Stephen Tobos for any further remarks.

Steven Kobos
Steven Kobos
President & CEO at Excelerate Energy

Want to thank all of our analysts and investors on the call for your interest and you're going to see us out on the road. I think we'll be out at a number of conferences this month and next month, we look forward to seeing as many of you as we can. Thank you.

Operator

Thank you all for joining today's call. You may now disconnect your lines.

Executives
    • Craig Hicks
      Craig Hicks
      Vice President of Investor Relations & Strategy
    • Steven Kobos
      Steven Kobos
      President & CEO
    • Dana Armstrong
      Dana Armstrong
      Executive VP & CFO
    • Oliver Simpson
      Oliver Simpson
      Executive VP & Chief Commercial Officer
    • David Liner
      David Liner
      Executive VP & COO
Analysts
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Key Takeaways

  • Accelerate delivered $100M in adjusted EBITDA and $56M of adjusted net income in Q1, driven by over 90% take-or-pay contracts, and raised its 2025 adjusted EBITDA guidance to $345M–$365M.
  • The company maintained best-in-class operations with 99.9% FSRU uptime and exceeded all primary safety targets to ensure consistent revenue and customer commitments.
  • Construction of the new FSRU Hull 3407 remains on schedule for mid-2026 delivery, with significant interest from potential customers for its deployment.
  • Accelerate agreed to acquire Jamaica’s sole LNG import and power platform for approximately $1B, adding two terminals and a CHP plant in an immediately EPS-accretive deal with investment-grade counterparties.
  • The balance sheet was bolstered by extending the revolver maturity to 2029 (capacity increased to $500M) and completing a $212M equity offering plus an $800M bond issue to fund the Jamaica transaction and reduce debt.
AI Generated. May Contain Errors.
Earnings Conference Call
Excelerate Energy Q1 2025
00:00 / 00:00

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