Stabilis Solutions Reports Strong Q2 Growth and Plans for Expansion

Stabilis Solutions Inc. (Ticker: SLNG) Reports Strong Q2 2024 Results

Stabilis Solutions Inc., a prominent player in the liquefied natural gas (LNG) production and distribution sector, has announced a remarkable revenue growth of over 44% year-over-year for the second quarter of 2024. The company is keen on expanding its operations, which include plans to establish a dedicated LNG bunkering facility along the U.S. Gulf Coast and at strategic ports across the country.

Additionally, Stabilis Solutions has made strides in the aerospace sector and aims to enter the markets for emergency and primary power generation for data centers.

Key Highlights:

• Revenue increased by more than 44% compared to the same quarter last year.
• The company achieved over $5 million in operating cash flow and closed the quarter with nearly $16 million in cash and available credit.
• Expansion plans include the first purpose-built waterfront LNG bunkering facility on the U.S. Gulf Coast and operations at critical ports.
• Stabilis Solutions intends to venture into emergency power delivery and primary power generation for the data center industry.
• The company has seen growth as a preferred LNG supplier in the aerospace sector.
• A phased expansion at the George West, Texas facility is currently underway to double its storage capacity.
• Stabilis maintains a strong liquidity position, expecting to uphold it throughout 2024.

Company Perspective:

Stabilis Solutions focuses on leveraging its business model to create growth opportunities within marine, commercial, and industrial sectors. They are in advanced discussions with potential partners to support expansion at several U.S. ports, notably Galveston. The company is optimistic about prospects in the emergency and backup power generation markets, particularly concerning data centers.

Market Sentiment:

While no bearish aspects were explicitly mentioned during the earnings call, several positive developments were highlighted:

• A 14-month contract extension for emergency power generation has been secured.
• The company is a major player in the inland LNG distribution market, being one of the largest LNG suppliers.
• Stabilis is actively seeking avenues to deploy capital to satisfy the rising demand for its services and products.

Quarterly Overview:

Stabilis Solutions reported revenues of $18.6 million for Q2 2024, representing a 44.1% increase over the $12.9 million from the same quarter last year. This growth is attributed to heightened demand from new long-term customer agreements and increased utilization of their South Texas liquefaction facility. The company’s net income was slightly above breakeven, a significant improvement from a net loss of $2.2 million in the prior year.

The adjusted EBITDA for the quarter was recorded at $2.1 million, reflecting a positive shift in operational efficiency. Historically, the second quarter has been the slowest for the company due to seasonal factors; however, this quarter marked Stabilis Solutions’ first-ever profitable second quarter.

As of June 30, 2024, Stabilis had total cash and equivalents of $11.5 million, along with $4.4 million available under its credit facility. Total outstanding debt stood at $8.6 million, resulting in a net positive cash position.

Future Expectations:

The company intends to ramp up capital expenditures as the expansion at its South Texas LNG storage facility progresses and remains committed to maintaining a solid liquidity position through the remainder of 2024.

Stabilis Solutions is positioned for further growth and expansion across various sectors, with robust financial health and strategic initiatives aimed at addressing the rising demand for LNG, especially in the marine, commercial, industrial, and aerospace markets. The construction of necessary infrastructure and capacity enhancements will solidify Stabilis Solutions’ standing in the LNG bunkering and emergency power generation sectors.