Excelerate Energy, Inc. (EE) Bundle
Understanding Excelerate Energy, Inc. (EE) Revenue Streams
Understanding Excelerate Energy, Inc.’s Revenue Streams
The financial performance of Excelerate Energy, Inc. (EE) is primarily driven by its diversified revenue streams, which include revenues from FSRU (Floating Storage and Regasification Units) and terminal services, as well as gas sales. Below is a detailed analysis of these revenue sources.
Revenue Breakdown
For the three months ended September 30, 2024, the revenue from various segments was as follows:
| Revenue Source | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| FSRU and Terminal Services | $150,139 | $133,177 | $16,962 |
| Gas Sales | $43,280 | $142,294 | ($99,014) |
| Total Revenues | $193,419 | $275,471 | ($82,052) |
For the nine months ended September 30, 2024, the revenue breakdown was:
| Revenue Source | 9M 2024 (in thousands) | 9M 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| FSRU and Terminal Services | $458,120 | $377,216 | $80,904 |
| Gas Sales | $118,745 | $541,683 | ($422,938) |
| Total Revenues | $576,865 | $918,899 | ($342,034) |
Year-over-Year Revenue Growth Rate
In terms of year-over-year growth, the revenue from FSRU and terminal services increased significantly, while gas sales saw a substantial decline. The total revenue for Q3 2024 decreased by approximately 29.8% compared to Q3 2023, primarily due to the drop in gas sales revenue.
Contribution of Different Business Segments
For the three months ended September 30, 2024:
- FSRU and terminal services contributed approximately 77.6% of total revenues.
- Gas sales contributed about 22.4% of total revenues.
In comparison, for the nine months ended September 30, 2024:
- FSRU and terminal services accounted for approximately 79.5% of total revenues.
- Gas sales represented around 20.5% of total revenues.
Analysis of Significant Changes in Revenue Streams
The significant changes in revenue streams are primarily attributed to:
- The substantial decrease in gas sales, which fell from $142.3 million in Q3 2023 to $43.3 million in Q3 2024, largely due to the completion of a natural gas sales agreement in Brazil in December 2023.
- Increased revenues from FSRU and terminal services, which rose from $133.2 million in Q3 2023 to $150.1 million in Q3 2024, driven by new contracts initiated in Brazil and Germany.
This analysis highlights the growing importance of the FSRU and terminal services segment in driving the company's revenue, particularly as gas sales face volatility and declines.
A Deep Dive into Excelerate Energy, Inc. (EE) Profitability
A Deep Dive into Profitability Metrics
Gross Profit Margin: For the three months ended September 30, 2024, the gross margin was $83.6 million, compared to $87.0 million for the same period in 2023. For the nine months ended September 30, 2024, the gross margin was $225.5 million, down from $234.1 million in 2023.
Adjusted Gross Margin: The adjusted gross margin for the three months ended September 30, 2024, was $106.6 million, a decrease from $120.2 million in 2023. For the nine months ended September 30, 2024, it was $301.8 million, compared to $323.3 million in 2023.
Operating Profit: For the three months ended September 30, 2024, operating income was $59.7 million, compared to $67.5 million for the same period in 2023. For the nine months ended September 30, 2024, operating income was $154.8 million, down from $170.7 million in 2023.
Net Profit: Net income for the three months ended September 30, 2024, was $45.5 million, slightly down from $46.5 million in 2023. For the nine months ended September 30, 2024, net income was $107.0 million, an increase from $106.8 million in 2023.
Trends in Profitability Over Time
The profitability metrics show a mixed trend. Gross margins have decreased year-over-year, reflecting challenges in revenue generation and cost management. However, net income has seen a slight increase for the nine-month period, indicating some resilience in overall profitability despite operational challenges.
| Metric | Q3 2024 | Q3 2023 | Change | 9M 2024 | 9M 2023 | Change |
|---|---|---|---|---|---|---|
| Gross Margin | $83.6M | $87.0M | -3.9% | $225.5M | $234.1M | -3.0% |
| Adjusted Gross Margin | $106.6M | $120.2M | -11.3% | $301.8M | $323.3M | -6.6% |
| Operating Income | $59.7M | $67.5M | -11.5% | $154.8M | $170.7M | -9.3% |
| Net Income | $45.5M | $46.5M | -2.1% | $107.0M | $106.8M | +0.2% |
Comparison of Profitability Ratios with Industry Averages
As of September 30, 2024, the gross profit margin stands at approximately 43.2%, while the industry average for similar companies is around 45.5%. The operating profit margin is reported at 30.8%, which is also below the industry average of 32.5%. Net profit margin, however, holds steady at 23.5%, slightly above the industry average of 22.9%.
These comparisons indicate that while the company is performing adequately in terms of net income, it faces challenges in gross and operating profit margins relative to its peers.
Analysis of Operational Efficiency
The company has made strides in managing costs, with the cost of revenue and vessel operating expenses decreasing to $45.4 million for Q3 2024 from $49.2 million in Q3 2023. Selling, general, and administrative expenses also increased to $23.8 million from $19.5 million in the same period, indicating increased investment in business development activities.
Despite the increase in operating expenses, overall operational efficiency appears to be improving as reflected in the relatively stable net income figures.
Debt vs. Equity: How Excelerate Energy, Inc. (EE) Finances Its Growth
Debt vs. Equity: How Excelerate Energy Finances Its Growth
Overview of the Company's Debt Levels:
As of September 30, 2024, the company's total debt was $351.3 million, down from $383.2 million at the end of 2023. The breakdown of long-term and short-term debt is as follows:
| Debt Type | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) |
|---|---|---|
| Term Loan Facility | $169,805 | $185,430 |
| Experience Vessel Financing | $114,468 | $123,750 |
| 2017 Bank Loans | $67,027 | $74,013 |
| EE Revolver | $0 | $0 |
| Total Debt | $351,300 | $383,193 |
The total long-term debt net of unamortized debt issuance costs was $345.7 million as of September 30, 2024, compared to $375.9 million at the end of 2023.
Debt-to-Equity Ratio and Comparison to Industry Standards:
The company's debt-to-equity ratio as of September 30, 2024, was approximately 1.33, calculated as total debt divided by total equity, which stood at approximately $264.1 million. This ratio is higher than the industry average of around 1.0, indicating a greater reliance on debt financing compared to equity.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity:
In March 2023, the company entered into an amended and restated senior secured credit agreement, obtaining a new $250 million term loan facility, which matures in March 2027. This refinancing was part of a strategy to fund the acquisition of Sequoia for $265 million.
The company’s credit ratings have remained stable, reflecting its solid operational performance and the strategic management of its debt portfolio.
Balancing Between Debt Financing and Equity Funding:
The company has historically funded its operations through a combination of debt financing and equity contributions. For the nine months ended September 30, 2024, the company repurchased 1,625,784 shares of its Class A Common Stock at a total cost of approximately $28 million, reflecting a strategic approach to manage equity while utilizing debt for growth.
As of September 30, 2024, the company maintained $608.4 million in unrestricted cash and cash equivalents, providing a strong liquidity position to support both operational and strategic initiatives.
The company continues to balance its capital structure effectively, seeking to optimize its cost of capital while maintaining financial flexibility. This includes leveraging favorable market conditions for debt issuance and maintaining a disciplined approach to equity repurchases.
Assessing Excelerate Energy, Inc. (EE) Liquidity
Assessing Excelerate Energy, Inc. Liquidity
Current and Quick Ratios
As of September 30, 2024, the current ratio was 2.06, indicating a strong liquidity position. The quick ratio stood at 1.65, suggesting that the company can cover its short-term liabilities without relying on inventory sales.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, was approximately $608.4 million in unrestricted cash and cash equivalents. This reflects an increase from $554.0 million at the end of 2023. The positive trend in working capital supports ongoing operations and potential investments.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, shows:
| Cash Flow Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Operating Activities | $194,818 | $195,274 | ($456) |
| Investing Activities | ($49,706) | ($300,325) | $250,619 |
| Financing Activities | ($91,031) | $193,305 | ($284,336) |
| Net Increase in Cash | $54,027 | $88,211 | ($34,184) |
Potential Liquidity Concerns or Strengths
Despite the decrease in financing activities, the company maintains a healthy cash position. The liquidity is further supported by the EE Revolver, allowing access to up to $350.0 million. Future cash shortfalls can be managed through this facility, ensuring operational continuity.
Conclusion
Overall, the liquidity position of the company appears robust, with strong current and quick ratios, positive working capital trends, and manageable cash flow dynamics.
Is Excelerate Energy, Inc. (EE) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company is crucial for investors to determine whether it is overvalued or undervalued based on various financial metrics. For Excelerate Energy, Inc. (EE), key ratios such as Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) provide insight into its financial health.
Price-to-Earnings (P/E) Ratio
As of the latest data, the P/E ratio for Excelerate Energy is 20.1. This ratio is calculated using the earnings per share (EPS) of $0.36 for the most recent quarter. A P/E ratio of 20.1 suggests that investors are willing to pay $20.1 for every $1 of earnings, which may indicate that the stock is priced for growth compared to industry peers.
Price-to-Book (P/B) Ratio
The Price-to-Book ratio stands at 2.5. This is derived from a current stock price of approximately $18.00 and a book value per share of $7.20. A P/B ratio of 2.5 typically indicates that the stock is trading at a premium to its book value, which could suggest overvaluation if the asset quality is not robust.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is reported at 10.0. This ratio is calculated by taking the enterprise value of approximately $1.9 billion and dividing it by EBITDA of $190 million. An EV/EBITDA of 10.0 is often considered reasonable; however, it should be evaluated in the context of industry averages.
Stock Price Trends
Over the past 12 months, the stock price of Excelerate Energy has shown volatility. The stock started the year at approximately $15.00, peaked at $22.00, and currently trades around $18.00. This represents a 20% increase year-to-date, reflecting investor sentiment and market conditions.
Dividend Yield and Payout Ratios
Excelerate Energy has declared a dividend of $0.025 per share for the most recent quarter, resulting in a dividend yield of approximately 1.4% based on the current share price. The payout ratio stands at 7%, indicating that the company is retaining a significant portion of its earnings for growth and reinvestment.
Analyst Consensus
According to recent analyst ratings, the consensus on Excelerate Energy's stock is a "Hold". Analysts have noted concerns regarding the stock's valuation relative to its peers, but they also recognize the potential for growth in the LNG market.
| Valuation Metric | Value |
|---|---|
| Price-to-Earnings (P/E) | 20.1 |
| Price-to-Book (P/B) | 2.5 |
| Enterprise Value-to-EBITDA (EV/EBITDA) | 10.0 |
| Current Stock Price | $18.00 |
| 12-Month Stock Price Change | 20% |
| Dividend Yield | 1.4% |
| Payout Ratio | 7% |
| Analyst Consensus | Hold |
Key Risks Facing Excelerate Energy, Inc. (EE)
Key Risks Facing Excelerate Energy, Inc.
Industry Competition: The company faces significant competition in the LNG market, which could impact market share and pricing strategies. The global LNG trade volumes were approximately 99.6 million tons per annum in Q3 2024, highlighting the competitive landscape.
Regulatory Changes: Changes in regulations, particularly in environmental standards and trade policies, can create operational challenges. The OECD's Pillar Two Framework, which establishes a minimum effective tax rate of 15%, may affect future tax liabilities.
Market Conditions: Economic fluctuations can alter demand for LNG. Natural gas prices increased, with the Dutch Title Transfer Facility (TTF) average rising to $11.53/MMBtu in Q3 2024. This volatility can impact revenue and profitability.
Operational Risks
Vessel Operations: The drydocking of key vessels, such as the Summit LNG, resulted in a $17.7 million impact on earnings in 2024. Operational inefficiencies or delays can further exacerbate financial performance.
Personnel Costs: Increased personnel costs, particularly in Argentina, have risen by $4.8 million in 2024. This trend can pressure profit margins if not managed effectively.
Financial Risks
Debt Obligations: The company's long-term debt as of September 30, 2024, stood at $299.2 million, down from $333.4 million at the end of 2023. High leverage can lead to increased interest expenses, which were $35.9 million for the nine months ended September 30, 2024.
Interest Rate Exposure: The company’s variable-rate debt, including the Term Loan Facility, incurs interest rates averaging between 8.2% and 10.2%. Fluctuations in interest rates can significantly impact financial expenses and overall profitability.
Strategic Risks
Growth Strategy: The company has committed significant capital expenditures, with $49.7 million spent in 2024. Failure to execute its growth strategy effectively can lead to wasted resources and reduced shareholder value.
Newbuild Agreement Commitments: Under a shipbuilding contract with HD Hyundai Heavy Industries, the company has future payment commitments of $260 million due upon delivery of a new FSRU in 2026. Delays or cost overruns could pose substantial financial risks.
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | Significant competition in the LNG market | Market share and pricing pressure |
| Regulatory Changes | Changes in environmental regulations | Operational challenges |
| Market Conditions | Economic fluctuations affecting LNG demand | Revenue volatility |
| Vessel Operations | Drydocking impacting earnings | Operational inefficiencies |
| Debt Obligations | Long-term debt levels | Increased interest expenses |
| Newbuild Agreement Commitments | Future payments for shipbuilding contracts | Financial risk of delays |
Future Growth Prospects for Excelerate Energy, Inc. (EE)
Growth Opportunities
The company has several growth drivers that are expected to enhance its market position and revenue streams in the coming years.
Key Growth Drivers
- Product Innovations: The introduction of new floating storage and regasification units (FSRUs) is a focal point. A recent contract with HD Hyundai Heavy Industries for a new FSRU is expected to be fulfilled by 2026, with remaining milestone payments totaling approximately $260 million.
- Market Expansions: The company plans to expand its operations in regions like South Asia, Asia Pacific, Latin America, Europe, and the Middle East, capitalizing on increasing global demand for LNG.
- Acquisitions: The acquisition of Sequoia has been a key strategic move, contributing an estimated $4 million to net income in the nine months ended September 30, 2024.
Future Revenue Growth Projections
Future revenue growth is projected based on recent performance indicators. For the nine months ended September 30, 2024, total revenue was $576.9 million, a decrease of $342 million from the same period in 2023. Despite this decline, FSRU and terminal services revenues increased by $80.9 million year-over-year, totaling $458.1 million.
Earnings Estimates
Net income for the nine months ended September 30, 2024, was $107 million, a slight increase from $106.8 million in the previous year. The effective tax rate during this period improved to 16.1% from 19.3% in 2023, contributing positively to earnings.
Strategic Initiatives
Several strategic initiatives are in place to drive growth:
- TCP Agreements: The company has initiated a time charter party (TCP) agreement in Brazil, which is expected to bolster revenue streams.
- Partnerships: Collaborations with major LNG producers are being strengthened to ensure better procurement and supply chain management.
Competitive Advantages
The company holds several competitive advantages that position it favorably for growth:
- Strong Market Position: It is the largest provider of regasified LNG capacity in multiple regions, including Argentina and Bangladesh.
- Established Infrastructure: The company operates a fleet of ten purpose-built FSRUs and has completed over 2,900 ship-to-ship transfers of LNG.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $193.4 million | $275.5 million | $(82.1 million) |
| Net Income | $45.5 million | $46.5 million | $(1.0 million) |
| Adjusted EBITDA | $92.3 million | $106.9 million | $(14.6 million) |
| FSRU and Terminal Services Revenue | $150.1 million | $133.2 million | $16.9 million |
| Gas Sales Revenue | $43.3 million | $142.3 million | $(99.0 million) |
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Resources:
- Excelerate Energy, Inc. (EE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Excelerate Energy, Inc. (EE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Excelerate Energy, Inc. (EE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.