NextDecade (NEXT) Q3 2024 earnings summary

Executive summary

• Developing a 5-train, 27 MTPA LNG facility in Brownsville, TX, with Trains 1-3 under construction and Trains 4-5 in development; first LNG expected in 2027.

• Over 90% of Phase 1's expected LNG production is contracted under long-term SPAs, providing stable cash flow once operational.

• Construction progress for Trains 1 and 2 reached 30.5% and Train 3 reached 9.8% as of September 2024, both on schedule.

• Advancing commercial and financing arrangements for Train 4, including new SPAs with ADNOC, HOA with Aramco, and an EPC contract with Bechtel.

• Actively managing regulatory challenges following a D.C. Circuit Court decision vacating FERC reauthorization, with ongoing legal appeals and continued construction.

Financial highlights

• Over 90% of Phase 1 nameplate capacity contracted, with Henry Hub-linked SPAs providing ~$1.8 billion in expected annual fixed fees.

• Total estimated capital project costs for Phase 1 are $18 billion, fully funded with $6.1 billion equity and $12.3 billion project debt.

• Net loss attributable to common stockholders was $123.2 million for Q3 2024, compared to net income of $107.6 million in Q3 2023.

• Derivative losses of $329.7 million in Q3 2024, compared to a $240.3 million gain in Q3 2023, driven by changes in forward SOFR rates.

• Cash and cash equivalents were $38.2 million as of September 30, 2024, with restricted cash of $227.6 million.

Outlook and guidance

• Management expects operating losses and negative cash flows to continue until the facility commences operations.

• Targeting positive FID on Train 4, with EPC contract finalized at ~$4.3 billion and price validity through December 2024.

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

• FID on Trains 4 and 5 is contingent on regulatory approvals, EPC contracts, commercial arrangements, and securing financing.

• There is substantial doubt about the company's ability to continue as a going concern without additional capital; plans include raising equity or debt and managing costs.