NextDecade (NEXT) Q2 2024 earnings summary

Executive summary

• Construction of the Rio Grande LNG Facility Phase 1 (Trains 1-3) is fully funded, on schedule, and on budget as of July 2024, targeting 27 MTPA export capacity.

• Over 90% of Phase 1 LNG production is contracted under long-term SPAs, ensuring stable cash flow.

• Advanced commercial agreements for Train 4, including finalized EPC contract at $4.3 billion, 20-year SPA with ADNOC, and non-binding HOA with Aramco.

• Sustainability initiatives include emissions reduction, net-zero electricity, and CCS projects at the LNG facility and other sites.

• Appointment of Tarik Skeik as COO in July 2024, bringing global project experience.

Financial highlights

• Over $18.4 billion in Phase 1 project financing secured: $6.1 billion equity, $12.3 billion debt.

• Net loss attributable to common stockholders was $32.6 million for Q2 2024, improved from $127.0 million loss in Q2 2023, mainly due to a $109.1 million derivative gain.

• Operating cash outflows for H1 2024 were $22.8 million; investing outflows $1.37 billion, mainly for construction.

• $1.115 billion in senior secured notes issued in June 2024 at 6.58% fixed rate, 18-year amortization starting 2029, maturing 2047.

• Cash and cash equivalents at June 30, 2024 were $38.1 million, with $26.2 million available under a revolving loan facility.

Outlook and guidance

• Targeting positive FID on Train 4 after finalizing commercial and financing arrangements; EPC contract price valid through December 2024.

• Train 4 financing expected to be 75% debt and 25% equity, with equity partners holding options for 60% of equity funding.

• Substantial doubt about ability to continue as a going concern without additional capital; long-term capital needs for future phases and CCS projects to be met through further debt and equity.

• LNG demand projected to grow robustly through 2040, supporting expansion and commercial momentum.

• Development of Train 5 to follow positive FID on Train 4.