Excelerate Energy Third Quarter 2026 Earnings Conference Call - EXCELERATE ENERGY INC

Financial Performance:

• Reported third-quarter net income of $60 million, up $10 million sequentially.
• Achieved record adjusted EBITDA of approximately $133 million, an increase of $13 million from the prior quarter.
• Q3 results driven by new Jordan charter commencement and higher LNG/power direct margins.
• Capital expenditures: $11 million in maintenance CapEx and $29 million in committed growth CapEx.
• Balance sheet as of September 30: $1.2 billion total debt (including finance leases), $357 million cash, and $500 million full availability on the revolving credit facility.
• Net debt stands at $871 million with trailing net leverage of 1.8x.
• Full-year adjusted EBITDA guidance narrowed to $495 million–$515 million.
• Full-year maintenance CapEx lowered to $65 million–$75 million; committed growth CapEx raised to $400 million–$410 million due to FSRU conversion timing.
• Board approved a quarterly cash dividend of $0.09 per share (payable December 3, 2026), targeting low double-digit annual growth through 2028.

Guidance and Future Outlook:

• Targeting Q1 2027 startup for Colombia and Q2 2027 startup for Iraq.
• Bahamas Hub Phase 1 (using Jamaica assets) to begin service in Q1 2027, generating ~$6 million EBITDA in 2027.
• Bahamas Hub Phase 2 (deploying FSU) targeted for H2 2028, with expected annual EBITDA run-rate increasing to ~$15 million from the Axto contract.
• FSRU conversion for the Patricia Camilla targeted for commercial deployment in 2028.
• Long-term EBITDA growth outlook: Management projects an incremental EBITDA growth of $250 million–$300 million by 2029, driven by Iraq, Colombia, FSRU conversion, relieferactions, and Caribbean expansion.
• Significant new LNG supply expected to enter the market in 2028, positioning the company to capitalize on import infrastructure demand.

Business Segments and Product Lines:

• Caribbean: Announced the Bahamas LNG Hub, an 11-year agreement with Axto (joint venture of AXPO and Domicile LNG) for up to 16 TBTUs/year. Includes plans for an offshore FSU terminal near Grand Bahama with estimated capital investment of $85 million–$95 million.
• Iraq & Colombia: Deployment plans finalized to avoid Strait of Hormuz transits; Iraq jetty reinforcement underway with workforce onsite. Colombia and Iraq targets remain Q1/Q2 2027 respectively.
• Brazil (Petrobras): Signed 5-year extension for the Sequoia FSRU through 2038, adding >$400 million to backlog; includes installation of a reliquefaction unit in 2028 to reduce boil-off losses.
• FSRU Conversion: Awarded engineering contract to CETRIUM for Patricia Camilla (170,000 m³ LNG carrier); total investment estimated at $260 million including vessel cost.
• Jamaica: Operating as an integrated LNG and power infrastructure hub, serving as the initial supply source for Bahamas Hub.

Market and Competitive Landscape:

• Caribbean viewed as a strategic "hub-and-spoke" region leveraging proximity to U.S. export capacity for logistical efficiency.
• Management highlights a projected global LNG-capable ship fleet exceeding 1,500 by end of 2030, creating substantial bunkering demand (estimated 27 MTPA by 2035).
• Company emphasizes agnostic approach to supply sources and end-users, focusing on capturing last-mile logistics and infrastructure value.
• Competitive advantage derived from mobile, redeployable assets and a diversified global footprint (Caribbean, LATAM, Middle East, South/Southeast Asia).

Risks and Challenges:

• Geopolitical and security sensitivities in the Middle East necessitated adjusting vessel deployment plans for Iraq and Colombia to avoid the Strait of Hormuz.
• Final conversion costs for the Patricia Camilla remain subject to engineering completion and scope finalization.
• Dependence on customer ramp-up in new markets (e.g., Iraq, Bahamas) to achieve maximum contracted volumes and earnings potential.
• Macro factors including interest rates and LNG price fluctuations (though management notes fixed-margin contracts insulate against price volatility).

Management Commentary and Tone:

• Tone is highly confident and optimistic, emphasizing record financial performance and successful execution of complex growth strategies.
• Management expresses strong conviction in the "building blocks" of growth, specifically the convergence of new LNG supply and infrastructure demand in 2028.
• Emphasis placed on safety and security as primary drivers for operational pivots in the Middle East without impacting financial returns.
• Leadership reiterated a disciplined capital allocation framework prioritizing accretive growth, dividends, and opportunistic buybacks.

Analyst Questions and Answers:

• Caribbean Scaling: Management confirmed the Bahamas agreement covers less than half the FSU capacity; potential exists to double throughput and capture bunkering demand, leveraging synergies with Jamaica.
• Iraq/Ramp-Up: Iraq project focuses on minimum take-or-pay of 250 mmcf/d, with expectations to ramp to 500 mmcf/d driven by power demand and reservoir maintenance needs; mechanical completion targeted for April 2027.
• Asset Flexibility: Reconfirmed that redeploying vessels for Iraq/Colombia does not alter contracted return profiles or EBITDA run-rates ($100 million for Iraq, 35% uplift for Colombia).
• Patricia Camilla: Confirmed investment of ~$260 million; commercial timing aligns with tight FSRU supply and incoming LNG supply waves in 2028.
• Supply Sourcing: Company remains agnostic on LNG sourcing, noting they are "more than covered" near-term but actively seeking to match customer needs globally.
• Shipyard Selection: CETRIUM and Nordgas (Ngs) selected for the conversion based on their industry-leading experience in FSRU conversions and reliquefaction modules.
• Shenandoah FSRU: The Shenandoah is a potential candidate for the Bahamas FSU, but a decision is pending a review of fleet commitments.

Other Key Points:

• The Bahamas Hub utilizes existing Jamaica infrastructure for initial deliveries before deploying the dedicated FSU in H2 2028.
• Management reiterated they do not compete with ISO container deliveries; they offer logistical advantages for full-parcel LNG delivery in the Caribbean.
• The Experience FSRU will undergo reliquefaction installation in Q1 2027, building on the successful partnership with Petrobras.
• Company remains focused on "last-mile" infrastructure and integrated platforms rather than just floating terminal operations.