Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NewMed Energy LP (DKDRF, Financial) reported a net profit of $137 million for Q2, marking a 47% increase from the previous year.
- The company achieved a significant increase in sales, reaching 2.8 BCM, primarily due to increased sales to the Egyptian market.
- EBITDA for the quarter exceeded $200 million, reflecting strong financial performance.
- A dividend distribution of $65 million was announced, adding to the $120 million already distributed this year.
- The company is on track with its Leviathan expansion project, which is expected to increase capacity significantly by mid-next year.
Negative Points
- Operating expenses increased by $6 million, impacting overall profitability.
- The company faces challenges in completing the engineering and securing tenders for drilling and subsea activities for the Leviathan expansion.
- There is a dependency on the Egyptian market, which could pose risks if market conditions change.
- Despite strong financial performance, the company still holds a significant total debt of approximately $1.75 billion.
- The timeline for the second phase of Leviathan's expansion is ambitious, with a target completion by mid-2028, which may face delays.
Q & A Highlights
Q: What is NewMed Energy's strategy for bond repayment, particularly for the bonds maturing in 2025?
A: Yossi Abu, CEO, stated that NewMed Energy has a strong cash flow, which will be used to repay the bonds. Currently, there is no significant need for additional facilities to repay the 2025 bonds. They have a $100 million line that is underused and could be utilized if necessary, but they do not foresee a need for new facilities.
Q: Can you provide an update on the Leviathan Phase 2 project timeline?
A: Yossi Abu, CEO, mentioned that the target is to have additional sales from Leviathan Phase 2 by mid-2028. Once the FEED is completed and commitments from suppliers are secured, they will announce the exact timetable.
Q: How did NewMed Energy's financial performance improve in Q2 2024 compared to the previous year?
A: Tzachi Habusha, VP, Finance, highlighted that net profit for Q2 2024 was approximately $137 million, a 47% increase from the previous year's $93 million. This improvement was driven by higher natural gas sales and increased average gas prices.
Q: What are the key factors contributing to the increase in net revenues for Q2 2024?
A: Tzachi Habusha, VP, Finance, explained that net revenues increased by $38 million due to higher natural gas sales, rising from 2.5 BCM to 2.8 BCM, and a higher average gas price per MMBTU. Additionally, $6.5 million was received from the sales of Kondensat.
Q: What is the current status of NewMed Energy's debt position?
A: Tzachi Habusha, VP, Finance, reported a significant reduction in debt, with the repayment of the Leviathan Bond series 2023 amounting to $500 million. As of June 30, 2023, total debt stands at approximately $1.75 billion, consisting of Leviathan bonds with maturity dates in 2025, 2027, and 2030.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
