Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net income increased by 36% in the first quarter, demonstrating strong financial performance.
- LNG volumes sold increased by 8% compared to the previous year, indicating growing demand for their products.
- Generated nearly $4 million in operating cash flow in the first quarter, highlighting effective cash management.
- Secured a transformational marine bunkering supply contract and extended agreements with major customers, enhancing long-term stability.
- Liquefaction capacity is expected to be fully utilized through 2025, providing high visibility and predictability in operations.
Negative Points
- Dependence on third-party LNG supply networks could pose risks if disruptions or shortages occur.
- Seasonality affects financial performance, which could lead to fluctuations in quarterly results.
- The need to expand internal liquefaction capacity to meet growing demand could require significant capital expenditures.
- Relies on the development of infrastructure in strategic ports for bunkering operations, which may face regulatory and operational challenges.
- The market for LNG as a marine fuel is still developing, which could affect the pace of growth in the bunkering segment.
Q & A Highlights
Q: Could you discuss the milestones for FID regarding additional liquefaction capacity or marine terminal infrastructure to support bunkering?
A: (Westervelt Ballard, President and CEO) - We are advancing pre-FID initiatives, focusing on property leases or purchases and pre-deployment designs for different plants. We're also enhancing our supply chain and infrastructure across several coasts. The decision-making process involves balancing the risk of investments with commercial offtake opportunities. We are leveraging the Carnival contract and are in discussions with potential off-takers, which will influence our FID timing.
Q: Can you elaborate on the solutions Stabilis provides for data centers and industrial manufacturers concerned about power availability and grid reliability?
A: (Westervelt Ballard, President and CEO) - Many data centers require clean, supplemental, and redundant backup power solutions. Stabilis can play a significant role by providing natural gas and potentially other clean fuels as part of a comprehensive package to meet their behind-the-meter energy needs.
Q: Were both of your plants fully utilized in the first quarter?
A: (Westervelt Ballard, President and CEO) - Yes, our George West plant was highly utilized, and despite some maintenance in March, overall utilization was strong. This high utilization is expected to continue throughout the year and into the next.
Q: How significant was the seasonal business in the Northeast during the first quarter?
A: (Andrew Puhala, CFO) - The seasonal business contributed approximately three-quarters of a million dollars, which is a solid part of our business due to its high margins, although it represents a smaller portion of the total quarterly revenue.
Q: Can you provide more details on the marine bunkering fleet and potential customers?
A: (Westervelt Ballard, President and CEO) - We focus on ratable and large offtake from cruise ships, containerships, and car carriers. Discussions are ongoing with potential customers who need reliable LNG bunkering solutions. The key factors for these customers are availability and scalability of LNG supply.
Q: Could you update us on the space sector's performance in the first quarter and your outlook for this market?
A: (Andrew Puhala, CFO) - The space sector accounted for 6% of our revenue in the first quarter. We anticipate this sector will continue to grow and become a more significant part of our business, driven by increasing demand for our services in this high-margin area.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
