Fortress Transportation and Infrastructure Investors LLC (FTAI) Q1 2021 Earnings Call Transcript

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Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI)
Q1 2021 Earnings Call
Apr 30, 2021, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and thanks for standing by and welcome to the Q1 2021 Fortress Transportation and Infrastructure Investors LLC Earnings Conference Call. [Operator Instruction] I’d now like to show the convention over to your host, Mr. Alan Andreini. Please go forward, sir.

Alan AndreiniHead of Investor Relations

Thank you, Patricia. I want to welcome you to the Fortress Transportation and Infrastructure First Quarter 2021 Earnings Call. Joining me right here right this moment are Joe Adams, our Chief Executive Officer; Scott Christopher, our Chief Financial Officer; and Bo Woolley [Phonetic], the CEO of our Long Ridge Energy Terminal. We have posted an investor presentation in our press launch on our web site, which we encourage you to obtain, in case you have not already completed so. Also, please be aware that this name is open to the general public in listen-only mode and is being webcast. In addition, we can be discussing some non-GAAP monetary measures throughout the name right this moment. The reconciliation of these measures to probably the most instantly comparable GAAP measures could be discovered within the incomes complement. Before I flip the decision over to Joe, I want to level out that sure statements made right this moment can be forward-looking statements together with relating to future earnings. These statements by their nature are unsure and might differ materially from precise outcomes. We encourage you to overview the disclaimers in our press launch and investor presentation relating to non-GAAP monetary measures and forward-looking statements and to overview the danger elements contained in our quarterly report filed with the SEC. Now I want to flip the decision over to Joe.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Thanks, Alan. To begin, I’m happy to announce our twenty fourth dividend as a public firm, and our thirty ninth consecutive dividend since inception. The dividend of $0.33 per share can be paid on May 25 primarily based on a shareholder report date of May 14. Now let’s flip to the numbers. The key metrics for us are adjusted EBITDA and FAD or funds out there for distribution. Adjusted EBITDA for Q1 2021 was $47.2 million in comparison with This autumn 2020 of $46.2 million and Q1 2020 of $72 million. FAD was $14.4 million in Q1 2021 versus $54.2 million in This autumn 2020 and $96 million in Q1 2020. On a normalized foundation excluding gross sales proceeds and non-recurring objects, Q1 2021 FAD was $9.8 million in comparison with $35.7 million in This autumn 2020 and $67.4 million in Q1 2020. During the primary quarter, the $14.1 million FAD quantity was comprised of $60.6 million from our aviation leasing portfolio, damaging $3.8 million from our infrastructure companies and damaging $42.4 million from company and different.

Now, turning first to aviation, Q1 EBITDA for aviation of $61 million was a slight enchancment from This autumn as we anticipated, but additionally as we anticipated, we’re seeing a significant uptick in exercise in April and anticipate Q2 Aviation EBITDA to exceed $80 million. As an instance, we have now signed 20 new leases for CFM56 engines of which eight have already been delivered in the previous few weeks. 75% of our fleet is 737 NG and A320 CO plane and engines, that are flown largely in home shorter haul markets, that are poised for sturdy rebound by Q3 of this yr with many airways planning flight schedules which might be equal to or better than Q3 of 2019, and and 20% of our fleet is working within the cargo markets, which continued to expertise report excessive demand. Thus, our fleet is extraordinarily nicely positioned for the restoration.

Our PMA initiative is progressing nicely with the second half anticipated to be formally submitted to the FAA in July or August having had some minor tweaks to the ultimate components, which at the moment are full. But the massive improvement for us this quarter is the opening of our module retailer. We consider commercializing modules will disrupt conventional CFM56 engine upkeep by enabling airways, operators, house owners and MROs to economize, scale back turnaround time, eradicate price surprises, and in lots of instances, hold the engine on wing throughout the upkeep. We are nicely positioned to be the chief in modules with our complete suite of companies together with PMA components developed with Chromalloy, our USM or used service uncooked materials and provide popping out of our ARR partnership and the Lockheed Martin upkeep enterprise mixed with our massive stock of 250 CFM56 engines.

On Monday of this week, we formally launched the module retailer to the commerce and invite everybody to take a tour. You can discover the web site and a QR code hyperlink on web page 6 of our investor presentation, which can be posted right this moment. We’ve acquired a robust constructive response from all business contributors and are satisfied that this strategy can change how main engine upkeep was carried out for a significant section of the market because of the substantial financial savings generated by sustaining our stock of available modules and the potential monetary impression to FTAI is critical. For the CFM56 engine fleet right this moment, there are roughly 2,500 aftermarket overhaul store visits each year. And that is projected to develop to over 3,000 by 2024. Approximately 20% or say 100 of these store visits solely require work on one module, which makes it an ideal candidate for our module manufacturing unit. If FTAI may seize 20% of that market or 100 module swaps each year, we’d anticipate to generate $50 million in annual EBITDA for FTAI whereas saving an equal quantity or extra for the engine proprietor and operator, and as a extra full PMA product line turns into out there, this quantity will solely get greater.

Now let’s flip to infrastructure. First on Repauno after loading our first marine vessel in January by our state-of-the-art NGL or pure fuel liquids rail transloading system, we have now accomplished some facility operational enhancements, which can improve circulation charges from our current cavern by over 40% and in the end allow us to shortly change service between butane and propane to finest to fulfill market demand. In addition, we have now accomplished the loading of our second marine vessel and we have now 30 extra vessels scheduled over the approaching months. We have efficiently negotiated agency contracts for NGL volumes at Repauno starting within the second quarter, this quarter and committing as much as 90% of the present capability by the third quarter of 2021.

We plan to have quantity transferring to worldwide native and regional markets from Repauno this yr, demonstrating the optimization capabilities related to the strategic location of our facility. We proceed to debate long-term strategic contracts with each producers and off-takers, which can yield industrial justification for enlargement of our facility by the development of extra underground caverns. We see additionally elevated curiosity in additional discussions and renewable alternatives together with renewable fuels, manufacturing and most notably potential prospects for offloading staging and manufacturing wind farm parts.

At the second, we have now a number of conversations going with the main wind farm builders off the East Coast of the United States specifically New Jersey and New York, however as talked about beforehand, Repauno is nicely positioned for these alternatives with heavy load roll-on/roll-off dock capabilities and 200 out there acres for improvement. Turning now to Long Ridge, the Long Ridge energy plant is nearing completion. First, hearth of the fuel turbine is scheduled for May and we can be totally operational by mid-summer, which is a considerably forward of schedule relative to our deliberate November 2021 completion date, which was assured by our EPC contractor, and importantly beginning subsequent month, Long Ridge can be producing money circulation from take a look at operations.

By controlling our personal pure fuel and having the world’s most effective plant, Long Ridge has one of many lowest energy manufacturing prices in North America. This offers some ways for us to create extra values and a great instance of that is crypto mining. We’ve seen numerous curiosity from world crypto mining corporations, as they seek for websites which have the bottom price round 24/7 tower and scale. Several have recognized Long Ridge as the absolute best location to for his or her operations. As such, we evaluated two totally different alternate options to strategy this and improve EBITDA for the ability plant. The first method could be to lease land and promote tower to those miners at roughly $35 to $45 — $40 a megawatt hour, which is a premium to our current contracts of roughly $30 a megawatt hour. The second strategy could be to enter the mining enterprise and our present Bitcoin costs mining Long Ridge could be the equal of promoting tower for over $150 a megawatt hour after capital price restoration and bills, which is 5 occasions increased than our current energy gross sales agreements. This technique to make numerous sense specifically, since our energy plant is able to producing greater than the 485 megawatts that it’s presently rated for.

In the economics of utilizing this additional capability are extraordinarily enticing. If we have been to make the most of simply 20 megawatts for crypto mining, Long Ridge EBITDA may improve from $120 million each year to just about $165 million each year at present Bitcoin costs. So as such we’re arranging for the primary machines to be delivered this Monday by our property and are negotiating for a bigger order representing roughly 2 megawatts of energy for an August 2021 start-up. We additionally proceed to be enthusiastic about our hydrogen energy vegetation at Long Ridge. We are progressing on the design and engineering of the mixing skid in partnership with GE and stay on monitor to start out mixing hydrogen by the top of this yr. This will make Long Ridge the primary purpose-built hydrogen burning energy plant within the United States and the primary worldwide to mix hydrogen in a GE H Class fuel turbine.

We are in discussions with quite a few prospects who’ve expressed curiosity within the carbon-free electrical energy that we can present. Finally, the quarter was good for our frac sand enterprise regardless of continued industrywide slowdown in pure fuel drilling, we translated 210,000 tons of frac sand and 33,000 tons of highway offered. Turning now to Jefferson, exercise on the Jefferson terminal stays strong. Near-term product actions mixed with long-term undertaking improvement continues to extend Jefferson’s aggressive positioning within the Houston and Beaumont Port Arthur terminal panorama. While whole terminal throughput and economics continued to face headwinds within the quick time period, Jefferson posted its fifth consecutive constructive quarter with EBITDA of $2.8 million, down from $4.2 million in This autumn. The decrease quarter-on-quarter EBITDA could be attributed to challenged crude-by-rail economics throughout North America and misplaced throughput and refinery demand because of the ice storm and deep freeze in Texas in February. As we glance towards Q2 within the second half of 2021, we’re very optimistic about elevated refinery demand and manufacturing — elevated oil manufacturing, which drive terminal throughput increased within the subsequent few months.

Combined with improved buyer demand and a extra secure financial image globally and actually domestically, Jefferson has accomplished pipeline tasks that strategically aligned Jefferson with long-term high quartile finish customers. Jefferson is turning into an important logistical extension of two of the most important refineries in North America and the long-term technique and imaginative and prescient continues to make glorious progress and offering elevated logistics optionality for our prospects and constant in worthwhile enterprise revenues for Jefferson. As we described final quarter within the pipeline undertaking connecting the Jefferson Terminal with Exxon Beaumont refinery has been accomplished and there was in service since January. The gasoline and diesel pipelines account for 2 of the six pipelines that go beneath the river connecting Jefferson with Exxon, and we’re already realizing roughly 20% increased throughput volumes in comparison with the pre-pipeline volumes.

We anticipate refined product volumes to proceed to steadily improve on account of a extra financial and ratable logistical resolution. Additionally, undertaking improvement work is nicely beneath approach to put the extra 4 pipelines into service for different merchandise within the close to future. Line fill security and start-up procedures started in Q1 for the 2 different pipeline tasks. The pipeline to Motiva, which is owned by Saudi Aramco, is now operational and the pay line pipeline connecting Jefferson to Cushing, Oklahoma, we’re projecting can be operational in May. This crude optionality from each the inbound and outbound views will broaden the attain as accessible crude oils out there to Jefferson and our prospects create enhanced mixing choices and then begin to balancing out crude flows in and out of the terminal through pipe, rail and marine.

As to the steadiness of this yr, we stay in shut contact with our prospects within the US Gulf Coast, Canada, Mexico and Utah and are getting nearer and finalizing a number of large-scale tasks with our main prospects. So in conclusion, as we glance again over the previous few months, we have been to mark the top of the pandemic and the start of the restoration on the calendar, the top of Q1 appears like a reasonably good guess. Even nonetheless in Q1 in infrastructure, we accomplished the three pipeline tasks at Jefferson, the pure fuel loading export terminal at Repauno and are nicely on the best way to commissioning the ability plant at Long Ridge. And in Aviation, we proceed to enhance the positioning of our fleet for the restoration and have added a wonderful group of latest airline prospects to our community, and very importantly, we have now mixed our CFM56 merchandise into an ecosystem that may attain and attraction to the complete CFM56 person base by our model new module manufacturing unit. So whereas feeling an awesome sense of aid that the journey and Infrastructure worlds are rising once more, I’m extraordinarily enthusiastic about what different new issues we will do to make 2021 and 2022 really distinctive for our workers, our prospects and our buyers.

So with that, I’ll flip the decision again to Alan.

Alan AndreiniHead of Investor Relations

Thank you, Joe. Operator, chances are you’ll now open the decision to Q&A.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Your first query comes from the road of Josh Sullivan from Benchmark Company. Your line is open.

Josh SullivanBenchmark Company — Analys

Hey, good morning, Joe. And Scott. Nice quarter right here.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Good morning.

Josh SullivanBenchmark Company — Analys

Sounds such as you guys, you guys have numerous irons within the hearth right here, however possibly if we may begin with the Lockheed three way partnership on the brand new module retailer, you talked about sturdy preliminary demand within the remarks, are you able to simply elaborate or possibly quantify what that preliminary response appears like, many frequent thread amongst early adopters so far as buyer profile or property their registering right here?

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. We have numerous innovation. We timed the launch on Monday to kind of which the massive Orlando upkeep and restore convention began on Tuesday. So that was intentional. And so, as a part of the advertising and marketing — preliminary advertising and marketing effort, we have been with all of — with numerous the proper individuals to be in entrance of and an excellent response from the within the goal group and the goal group is primarily going to be three totally different classes, since will probably be aviation upkeep procurement people who purchase and handle the components provide and the engine issues which might be purchased from exterior for his or her upkeep companies and modules simplifies their life in numerous method. So a really constructive response from some very massive airways so massive airways in some instances have their very own upkeep store, so it illustrates the diploma in the event that they’re taking a look at price financial savings in addition to capital effectivity. So that was constructive and additionally small airways who haven’t got the assets. So that group may be very, very intrigued and and is following up.

The second is numerous upkeep retailers. So in case you have a giant upkeep operation injecting being able to purchase and promote and trade modules provides you numerous flexibility. So the massive impartial MRO retailers we have been additionally very engaged with. And then thirdly is in the end lessors as a result of lessors are managing upkeep reserves and upkeep bills and avoiding store visits is simply turning into a better and increased precedence. So there have been line convention primarily of the primary two, not numerous lessors there, however it was actually extra of a maintenance-oriented conferences. And at that convention or throughout the first week, we have about 50 individuals to enroll and it’s largely airways and the upkeep individuals and signing up means you get entry to take a look at our stock.

And right this moment prematurely of this, we constructed up a module stock so we have now 43 modules listed on the web site. You can click on on a fan, a core, LPG and you may see what we have now out there and get detailed technical data and then you may as well request a swap, so in case you have an trade that you just wish to do. So in case you have an LPT for instance that wants a store go to, we’re in search of changing that with some one who does not, it has hours cycles out there, you may specify what you’d wish to trade, you may specify the timing of once you wish to do it and you may as well display screen and scan our inventory-to-suit the necessities that you just want are met by any of our out there stock and we intend to maintain in all probability about that degree variety of modules out there, you wish to have sufficient stock so individuals can discover that they need. It’s a bit like having retailer you wish to have in all probability 50 or so modules on the shelf.

So all in all, it is off to an awesome begin. Obviously to consummated sale, you may’t — you are not going to try this over the web site, you are going to wish to comply with up with individuals and guarantee that they’re actual and what they — and what we have now reached their wants. But, it’s a useful gizmo and an awesome effectivity to get individuals utilizing it and enthusiastic about how they will scale back the downtime and in the end, we’ll transfer extra as nicely and I determine there’s numerous enthusiasm about having the ability to do some upkeep many engines on wing. So we have now partnerships you are speaking about with different upkeep retailers that may permit us to supply that service. And for those who can keep away from taking engine off the wing, that is an enormous, enormous price financial savings. So I believe it was an awesome launch and we’re very excited and buyer base appears very fanatic [Phonetic] and it is really a singular providing there’s no one that has completed — no one has something like this together with the OEMs. So the OEM is rarely going to have PMA so. So we really feel like we have one other kind of boundaries to entry or one other leg up on in the marketplace.

Josh SullivanBenchmark Company — Analys

Got it. That’s all very useful. And then possibly simply as a second query. The demand you are seeing on the Aviation facet, the step-up you are pointing to right here in 2Q implies some sturdy sequential exercise. What are you seeing that offers you that confidence? And then possibly what’s your home versus worldwide journey profile breakdown?

Joseph P. AdamChairman of the Board and Chief Executive Officer

So we — after we speak about home, are you speaking about US or are you taking about home markets world wide?

Josh SullivanBenchmark Company — Analys

Domestic markets world wide.

Joseph P. AdamChairman of the Board and Chief Executive Officer

So we’re about, as I discussed that 70% — 75% of our fleet is A320 COs and 737 NGs, that are actually home airplanes. So 75% and we have been consciously focusing on that market and we’ll — that is prone to continue to grow. The remainder of our fleet is within the cargo market. So it is actually between — these are our major focus. And these are to speculate markets in Aviation proper now. So we’re closely focused on home, which we like and what we’re seeing is, is what we thought, is there’s nonetheless a good quantity of stock and inexperienced time out there on the market that airways can proceed to make use of earlier than they do store go to. So store visits are being deferred however airways are wanting forward and so look, I’m going to fly my fleet all out in Q3 of this yr and possibly in This autumn and Q1 subsequent yr as a result of there’s numerous pent-up demand. They’re going to expire of capability pretty quickly when it comes to engines out there and airways are notoriously not good at planning. So they’re beginning to — So as I discussed, we have put out various engines on lease, and I believe a few of these, a few of these are two carriers that have been popping out of restructuring and popping out of chapter and in some instances who want raise and haven’t got numerous choices.

And then the subsequent group goes to be airways that notice that fairly quickly they are going to run out of engines and what they’re doing now could be lining up. We’re negotiating lease agreements and renegotiating they are going by stock they need availability, and they want engines on their facility out there, so that they’re beginning to prepare for the one they are going to want to those engines, and there are some RFPs popping out with some airways seeking to specify they need 10 or 15 engines within the greater airways out there. So they’re seeing it and we’re beginning to plan. And in order that’s type of a second wave.

And then the third wave is absolutely once you expend all of the inexperienced time and that I believe can be This autumn, Q1 of, name it, Q1 of 2022 the place individuals have to start out doing store visits once more in good quantity and that’s — there’s a honest quantity of lead time, as a result of if you wish to get into store, you must order components. You should get a slot and in order that takes superior lane and that is I believe the place our module manufacturing unit actually matches a particularly nicely as a result of for those who solely want to buy — if an engine solely must work on the LPG, you do not wish to put the complete engine within the store and await the LPG to be fastened so doing a swap is absolutely very, very environment friendly and as I say, it is disruptive to the best way it is completed now as a result of individuals do not do it that method, they assume, if every thing is that is my engines, do not give me a special modules that it is change. Airlines themselves do it and I believe the remainder of the business goes to get there in a short time.

Josh SullivanBenchmark Company — Analys

Got it. I’ll get again within the queue. I respect the time.

Operator

Your subsequent query comes from the road of Guiliano Bologna from Compass Point. Your line is open.

Guiliano BolognaCompass Point — Analyst

A fast query, type of going again to what you are mentioning final quarter on the Aviation section you’d mentioned roughly there are three totally different parts from contribution from current engines, there was contribution from new investments and then from the type of components and upkeep JV initiatives that we bought to go, name it, $450 million of Aviation EBITDA for ’21 and there’s roughly, name it, $50 miiion or $60 million for infrastructure in ’21, was that you just’re type of going for and leaving out the company section? I’m curious how these items nonetheless come collectively and how you the way you are enthusiastic about that for ’21 given a few of the early ends in the yr.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yeah. Well, we did not actually anticipate a lot out of Q1 as I discussed within the final name and and that’s proved to be true, as a result of restrictions have been closely in place in Q1 as you realize, however they’re now opening up and everyone’s planning from extra flying. So we’re nonetheless of the view that the $450 million for 2021 is achievable and the parts have been roughly, I believe it was $320 million from the present portfolio, $80 million from new investments and $50 million from the three JVs, the companions — partnerships, with Chromalloy, Lockheed Martin and AAR and so it is clearly going to be closely back-end loaded so massive, massive leap in Q3 and This autumn, which is smart given what I used to be simply speaking about. So we consider that’s, that is nonetheless our view is, for the yr.

And then on infrastructure additionally that I believe the $50 million may be very achievable. We’ve bought, as I discussed, good initiatives now to Repauno with a lot of exercise round pure fuel liquids and we’re offered out for the summer season and I believe that is simply going to construct, the momentum goes to construct there and we’ll give you new methods to earn money on and on the monitor that we’re now doing enterprise throughout the totally different counterparties. Long Ridge begins firing first hearth this month and/or May and activates August so that can begin contributing in Jefferson very, very useful. The quantity is choosing up in addition to touchdown a number of massive contracts right here within the subsequent couple of months.

Guiliano BolognaCompass Point — Analyst

That’s nice. And then I’m supplying you with a little bit bit type of to the feedback you are making about doubtlessly beginning to have a Bitcoin mining enterprise initiatives at Long Ridge and one of the essential element of Bitcoin mining is normally energy price. And I assume a few questions. What your price per megawatt hour is on the energy plant? And then from there, there are type of two follow-ons. One was that you just’d have two current contracts for provide agreements. And I believe these — you’ve got the power to cancel these since you’ve been speaking about a few of the knowledge facilities that will have concerned canceling these. I’m curious if it is doable to cancel or partially canceling these if that have been — the enterprise have been to achieve success. We have a server these. I’m curious for those who chosen any particular sort of Bitcoin mining gear as a result of there are a number of totally different suppliers on the market. I’ve bought of you utilize made stage the place you’ve got a particular mining gear in thoughts.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes, I’ll take the primary and I’ll let Bo speak in regards to the gear, however when it comes to the price of energy, I imply, we have checked out numerous these corporations. They’re beginning up and changing coal-fired energy vegetation and different older property which might be being repositioned and we predict we have now by far the bottom price and it is in a number of totally different classes. But the — And we’re already vertically built-in. So years in the past we determined to go and develop our personal fuel so we’re truly vertically built-in again to fuel within the floor and nobody has that functionality, which suggests we predict our price of energy on the primary 20 megawatts is about $12 a megawatt hour. So that’s far decrease than you could have seen and I believe far decrease in actuality in most individuals, as a result of lots of people keep away from — are ignoring price that they simply are handy to disregard. So I believe we have $12.

And one of many explanation why the primary 20 megawatts is fascinating to us and kind of bought us pondering is that our energy plant goes to be rated 485 megawatts by the producers. So initially, that is probably the most quantity of energy you may promote beneath the capability public sale. So you may get paid for capability with out ever utilizing it and it is solely the rated quantity we will receives a commission for till there’s a few years of working knowledge, you may’t actually upsize just isn’t 45. But we will truly produce 505 megawatts. So the primary 20 megawatts is the most cost effective electrical energy is aware of. It’s simply marginally solely, the one factor we pay for is the price of gas. So that is what does pondering and provides us kind of the bottom price of energy however past that, we have now one other, was it 40 megawatts that we by no means contracted.

Unidentified Speaker

Yeah. We have about 457 contracted right this moment.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yeah. So 457 is beneath these long-term contracts, which is like 94% manufacturing. And so we have now one other 40 megawatts or 30 megawatts that we may use with out terminating any of our current contracts that the plan was simply to promote that into the rising market. And then thirdly, if we wished to transcend that we have now the proper beneath our long-term off-take agreements to terminate these contracts beneath make-whole provisions. So consider it like an rate of interest swap that if the market strikes, you simply have to have the ability to exchange the counterparty as nicely available in the market and exchange what they’ve left with another person and proper now as a result of the best way the ability markets have moved, they really would pay — if we elected to terminate these contracts beneath the make-whole provisions, the counterparty would owe us cash.

So fairly an fascinating dynamic and it is a one-way possibility. We have the proper to terminate however the counterparty doesn’t have proper to terminate so — and restructure that method intentionally so we may and then discover different off-takers and then we exchange these with increased behind the meter customers. So actually a lot of, I imply we have now super quantity of flexibility to develop at very, very enticing worth. We have probably the most environment friendly turbine on the planet, the very best warmth fee is the 7HA.02, which is what we’re utilizing. So I do not assume anyone on the planet has bought that kind of firepower towards what we will. And clearly, the market has turn into extra aggressive. And persons are placing extra assets towards it, it may be probably the most price suppliers goes to win. So that is the place I believe we have now — and we’re extra vertically built-in than anyone within the enterprise that we all know of. Bo, do you wish to speak in regards to the machines?

Unidentified Speaker

Yes. So the machines that can begin working Monday are S19pros and then for the subsequent batch that we’re taking a look at, almost definitely the S19Jpro, which is the latest mannequin and one of the environment friendly when it comes to power utilization.

Joseph P. AdamChairman of the Board and Chief Executive Officer

And there are 100 terahash per second or 110 terahash per second for the non-J [Phonetic].

Unidentified Speaker

Right.

Guiliano BolognaCompass Point — Analyst

That’s nice. That’s very useful. I simply have one very fast one and I’ll leap proper again within the queue after that. Really respect all the assistance us. I’d be curious type of what the ability price is type of you’ve got recognized the roughly $12 per megawatt hour for the entry element. I’d be curious as you go additional down the construction facet, what the typical is for those who was on the core manufacturing capability and the place that price would possibly take out.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Probably 16, 17. Yeah, yeah. I believe order at the moment are 16, 17 and now that may be represented for the complete remaining capability.

Guiliano BolognaCompass Point — Analyst

That’s nice. I actually respect on a regular basis and answering my questions.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. Thanks.

Guiliano BolognaCompass Point — Analyst

Congrats on all of those initiatives. Thank you.

Operator

We have the road of Chris Wetherbee from Citi. Your line is open.

Christian WetherbeeCiti — Analyst

Hey, thanks. Good morning, guys. Joe, possibly if we may begin within the aviation facet. I imply you talked about clearly the ramp up that you just’re anticipating within the second quarter from what you probably did within the first quarter. If I look again over the past couple of years and clearly final yr was a big under-earning yr but when I wished to type of get a greater sense of what the portfolio appears like right this moment and what the potential initiatives that you just’re engaged on appear to be when it comes to a stroll from the place we have been final yr. Could you kind of assist kind of construct the items again up, so we will get possibly extra of a clear run fee of what Aviation is able to on an adjusted EBITDA foundation as soon as a few of these new initiatives are in place?

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. Well, I believe what we have completed is we have moved extra towards for the CFM56 engine, which I believe now could be about 50% of our whole funding. So that is in all probability up from possibly 30% previous to this era and we have now a few different offers there, we’re nonetheless engaged on that we predict will add to that and develop that. And then we have additionally elevated our cargo enterprise. So I believe that the place you have seen a lower has been 767 passenger enterprise we had and some 757 passenger. And so I’d say these two have gone down, and the CFM56 and cargo have gone up, and in order that’s strategically, I believe, the place we have been. We’ve determined actually two years in the past to start out doing that and then accelerated it with the pandemic. And then on high of that what we expressed is that we would like not solely will we wish to earn 25% EBITDA on invested Aviation Capital, we wish to develop income and EBITDA from different companies that aren’t tied to proudly owning property, assume Chromalloy, Lockheed Martin and AAR, which we are saying we predict we will earn $50 million this yr, and that quantity on the higher certain is considerably limitless in that and I believe we talked final time about how do you speed up them, you get airways to mainly allow us to outsource the upkeep of their CFM56 fleet and I believe that the module manufacturing unit is a type of moments the place we mentioned that is how we do it. That’s precisely — that is the mechanism and it is not that sophisticated and it permits airways to kind of use that service on an adhoc foundation as they need with out going by some main RFP course of that entails the OEM and 10 different individuals, so you may cope with options that saves the upkeep division some huge cash. And it is very accessible, simple to make use of, permits them to be versatile and how they use PMA, for instance, that is not kind of within the face of anyone. So it is a resolution to what we have been in search of. SoI believe that quantity is unbounded I actually do.

Christian WetherbeeCiti — Analyst

Okay, OK. That’s useful. And then I assume, possibly a query on Jefferson. So I’m type of curious of your take right here, so clearly some rail M&A information has been kind of constructing over the course of the final couple of weeks specifically final two weeks. And so, I used to be curious what your perspective is in case you have one. There’s two potential competing carriers for the KCS property. You guys clearly get served by KCS on the facility and as that enterprise continues to kind of develop as you have gotten entry to incremental refinery manufacturing, do you’ve got any take there? Is there any kind of view on the place you’d wish to see that transaction go? Or do you assume there’s any impression in any respect on Jefferson on account of the transaction? Any ideas you’ve got there could be useful. I’m curious kind of how this performs out for a important rail shipper.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes, we have now a viewpoint and we have been engaged with these Canadians are in search of help. So I believe that’s an fascinating dynamic and by no means it — it adjustments too. So as you consider the totally different choices. But I believe that it may work out higher for us. I believe we have gotten excellent dialogue. I imply it is wonderful how shortly and how they return your calls and issues like that. So it’s — we’re targeted on kind of creating a long-term circulation of merchandise from the Canadian market by rail and that in all probability entails DRU. There’s one which’s being constructed that is about to be completed and then there’s a couple extra which might be being deliberate and so we’re having good dialog with each of them and in the end assume if they’ve a — if there’s a Canadian provider that has a three-way all the best way to Beaumont that that is good for us and good for the purchasers, and additionally it would allow us to guarantee that that there is no such thing as a method that we get reduce out both so that you get most favored nations it doesn’t matter what occurs. So I believe we have now ours our ideas collectively. I believe it may be good for us. I believe the dialog across the plans are a lot accelerated and rather more open possibly than they have been earlier than. And it is a multi-party dialog too as a result of not solely we’re speaking to the Canadian railroads however we’re speaking to the Exxons and Motiva, so we’re impacting and additionally enthusiastic about it. So it is — it is high quality. I believe.

Christian WetherbeeCiti — Analyst

Yeah, I can think about that they are being pretty responsive, looks as if an fascinating alternative for you guys doubtlessly for those who possibly profit from all this, however —

Joseph P. AdamChairman of the Board and Chief Executive Officer

Exxon has a giant transfer. We do numerous drag 30,000, 35,000 barrels a day to Mexico for Exxon and that KCS is the provider. So that is going to be impacted. So there’s numerous issues happening. But I do assume it is — in the end it is normally good for the shippers.

Christian WetherbeeCiti — Analyst

Yeah. Okay. That’s useful. Thanks for the time. Appreciate it.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yeah. Thanks.

Operator

Next, we have now the road of Rob Salmon from Wolfe Research. Your line is open.

Robert SalmonWolfe Research — Analyst

Hey, good morning, guys and thanks for taking the query. I assume type of one other powerful. Okay. Item has been the presence type of infrastructure plans. Could you focus on some ideas about potential authorities grants to assist scale back FTAI’s capital outlays for each when it comes to the magnitude and timing, simply given what number of project-ready investments you’ve got throughout the complete portfolio?

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. So it is — that is one other space the place numerous focus and curiosity as a result of, for example, final week we’re speaking about Repauno in New Jersey. And I believe there are 4 authorities grant packages that we’re taking a look at proper now that doubtlessly we may apply for and may contain grant cash. So that is a great instance. There is one at Long Ridge, which we have already got and I believe we may complement that as nicely. And sure, there’s going to be numerous, I imply because the plan begins to take form, there’s clearly some key parts to and numerous it’s inexperienced targeted. So that is going to be one thing we’re enthusiastic about. We’ve bought various initiatives on new tasks round that, round ammonia, round hydrogen, round plastics recycling. So sure. I believe it is nice, since you do should have tasks there semi-ready. Not all going to be shovel prepared. If you’ve got some semi-ready, it is a lot simpler to get cash even for those who’re within the allowing part and you must do a [Indecipherable]. It’s like — that is like 4 years. So, I believe it is, I believe we’ll determine on the market’s going to be some good issues we’re going to have the ability to faucet into.

Robert SalmonWolfe Research — Analyst

Got it. But in all probability a little bit bit too early when it comes to determining what that would imply from a capital funding avoidance or the timeline.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. But I’m fairly certain we’ll get some. I imply I keep in mind rail in America we bought I believe like $300 million of presidency grant cash over a seven-year interval so it is an enormous and there are tasks that come up that you just by no means anticipate. So it may have an effect, buying and selling with hours invested in. And I believe we’re, it may be useful.

Robert SalmonWolfe Research — Analyst

That’s useful. And then I believe — if I believe greater image about a few of the proposed adjustments in taxes together with type of capitalized capital good points and carried curiosity will which have any impression when it comes to your greater image plans to to type of unlock some worth by spinning off type of aviation and Infrastructure or how the supervisor is compensated and even the way you guys monetize property extra broadly throughout the portfolio.

Joseph P. AdamChairman of the Board and Chief Executive Officer

I do not assume so. I imply, we began to consider that clearly. There may be very little to take a look at but when it comes to specifics. It’s largely ideas. But thus far establishing the USC Corp just isn’t something that — it is likely to be that as a substitute of a 21% vary. It’s a 28% however everyone’s going to be in the identical boat and if there’s a minimal tax possibly you aren’t getting to shelter as a lot in phrases, so — however it nonetheless makes-it’s nonetheless a greater construction for us to eliminate strains and that is one thing that that we’re taking a look at and it is on the goal record of issues to do and hopefully we’ll be capable of do one thing on the finish of the — by the top of this yr, however that is — we’re engaged on it and I do not see any impediments.

Robert SalmonWolfe Research — Analyst

Really respect the angle.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Thanks.

Operator

Next, we have now the road of Justin Long from Stephens. Your line is open.

Justin LongStephens — Analyst

Thanks. Good morning. So, Joe, you gave the steering for the Aviation enterprise to do over $80 million of EBITDA within the second quarter, however may you speak a little bit bit extra about what you are anticipating for aviation EBITDA within the third and fourth quarter, simply as we take into consideration that exit fee this yr and how that units the stage for 2022.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Sure. Well, for those who do the mathematics you realize it may be over $100 million for every of the Q3 and This autumn. So that is — it is fairly easy. How a lot? We’re pondering clearly, Q3 traditionally has been one of many greatest quarters and that is the place you may excessive utilization and we will get every thing transferring. But I additionally assume that this yr, I anticipate to be considerably totally different in that you may’t, I imply individuals have numerous journeys that they have not taken for the final 15 months and you may take 10 journeys in every week. So I believe there’s going to be a rollover within the seasonality. I believe on this yr will in all probability be lower than it has been traditionally in that individuals can be touring in This autumn and Q1 to see their relations or their prospects, their buddies or simply to get out of wherever they open had been. So I believe that flying ranges are going to — ought to be sustained I believe extra so than they’ve been previously. So that is type of the tough steering. We’re anticipating a great fourth quarter as nicely.

Justin LongStephens — Analyst

Okay, bought it. So 3Q and 4Q, it appears like possibly fairly comparable. I do know the opposite factor that I used to be enthusiastic about was simply the components and service enterprise in a few of the partnerships, you have introduced and how that would ramp. But it appears like a reasonably even cut up within the again half between the 2 quarters.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. So I believe that a few of the initiatives may, there’s a little little bit of a flywheel impact that you just get greater as you go and you would possibly do extra half out and extra buying and selling within the fourth quarter than we have now within the third quarter as a result of in Q3 you wish to use every thing you have bought. People can be hoarding and This autumn will in all probability be extra buying and selling alternatives, however not — I believe it’s going to be higher than some other yr however it’s comparable I believe.

Justin LongStephens — Analyst

Okay, nice. And then only a greater image strategic query. I do know there have been discussions on prior calls about splitting up the corporate sooner or later. Any up to date ideas across the likelihood of that materializing and the potential timing of that call.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. We have — It is on the record of priorities of issues to do and I believe we have now a few different objects we want forward of that. But then I consider will probably be pretty on high of the record and hopefully we get one thing completed by the top of this yr. That could be my private purpose, not a stake within the floor but, however it’s a purpose that I believe is one thing all of us agree we wish to do it.

Justin LongStephens — Analyst

Got it. Thanks. I respect the time.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Thanks.

Operator

Next, we have now the road of Robert Dodd from Raymond James. Your line is open.

Robert DoddRaymond James — Analyst

Hi, guys and congratulations on the outlook. If I can go to Repauno. You mentioned, I imply mainly you offered out by the third quarter, are you able to give us any shade on, you realize, there’s congestion in different areas, the transport and so on, and so on. How is the competitors to get slots at Repauno and our fundamental — are the purchasers — potential prospects beginning to attempt and speak to you about longer-term offers to type of lock up both dock slots or storage slots or something like that longer-term moderately than on an as wanted foundation.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes, they’re fairly a great industrial response. And I believe it will get to the, what we all the time felt is earlier than you might be in operation, persons are inherently skeptical and not keen to commit as a result of they’ve seen too many tasks that did not get — that did not full. So the massive step for us was in January loading the primary vessel being in service. And now we have mainly bought 30 ships. We’re going to be very, very busy for Q2 and Q3, which is seasonally the very, the sturdy marketplace for propane and butane, however the variety of PDH vegetation being constructed world wide and the quantity of export of pure fuel liquids continues to develop and we’re actually the one different terminal to market shock [Phonetic] within the East Coast of the United States. So I believe the industrial response has been nice. So now it is about how will we develop, how will we broaden our capability, as a result of as you level out, we can be — our slots — our dock can be occupied just about totally in second and third quarter. So then the subsequent enlargement goes to be a dock 2 and extra underground storage and we’re within the means of getting each of these permitted. So that is the — that is the sequence. I believe as soon as we have now — the summer season is over, I believe we’re, our plan is to go to off-takers and attempt to get multi-year commitments from them by the top of this yr for that extra capability. The different factor we’re taking a look at proper now, we’re primarily going to be rail served. And so we’re additionally — the opposite possibility is for connectivity, which means varieties. So that may be one other massive on leap up when it comes to capability and and effectivity.

Robert DoddRaymond James — Analyst

Thank you, Joe. I respect it. One fast one on the Aviation facet. Can you give us a full store go to clearly [Indecipherable] I imply it takes months. I imply, not simply the reserving sort however the precise time within the store. What’s the time differential between a full store go to of module swaps as a result of clearly we will promote so individuals $50 million on the fee plus three months. So that is it. It’s not simply the fee it is the time versus say — and then on the wing module swaps, how briskly, is {that a} fly in/fly out like two days later type of factor?

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. When you may’t — you could not do a module swaps on wing. But you are able to do sure repairs on wing and we’re taking a look at — and doing greater than is kind of very environment friendly. So there are partnerships we’re speaking about now to do to supply that on wing service that can give us actually a extra — it simply expands our portfolio of issues we will do to save lots of airways cash. In phrases of very module swaps into the complete store is that you just’re speaking in regards to the distinction in time might be between six months for a full store go to versus beneath 30 days for a module swap. So you may go — you may present an airline and we have completed this $1 million of price financial savings, simply from that the time financial savings. So there are enormous quantities of cash concerned in financial savings by individuals determining the way to use this service and we right this moment have 43 modules in stock. So it isn’t such as you’re going right into a retailer that is about to open and say, do you’ve got something or can I preorder and it is like if we have now it, so the financial savings are going to be — persons are going to study and then you definately experiment and say, nicely, I can do this and it is, we predict it may be fairly a fairly a giant factor.

Robert DoddRaymond James — Analyst

Thank you.

Operator

Next we have now a query from the road of Ari Rosa from Bank of America. Your line is open.

Ariel RosaBank of America — Analyst

Great. Good morning, Joe, Alan and Scott. So I wished to start out on the Aviation facet. Obviously final yr enthusiastic about buying aviation property was type of poisonous in some areas and more and more because the market improves, it looks as if you realize mainly consensus that demand for air journey goes to proceed. I’m questioning has that modified the provision of property, as you look to construct the portfolio. And do you assume the tempo of asset acquisitions doubtlessly slows due to that or how do you see that type of taking part in out and how is the market advanced for aviation property over the past couple of months?

Joseph P. AdamChairman of the Board and Chief Executive Officer

It’s a great query. The — I imply sometimes when you’ve got these extreme downturns, I imply the reply is, we predict there can be an excellent marketplace for investing in extra property and notably property which might be off lease as a result of that’s one thing that it is very powerful for any anyone with the portfolio does not wish to have extra property off lease. That’s actually the place I believe our major alternative will — has risen and will rise. And sometimes, once you get a extreme downturn on the backside and everyone is aware of you are within the worst downturn, nobody needs to promote. And so there are some nice offers and we have picked up a number of and we have purchased some however usually the quantity just isn’t very vital as a result of no one’s — persons are not that silly and they know it is, this isn’t a great time to promote. But as begin — as markets begin to get better and costs have moved up and they have already got I believe a little bit bit. So in the event that they have been down 40% now to down 30% then, however I believe you begin to see much more quantity and so I believe we’ll see it various cleanup trades the place persons are saying, I’ve bought 10 plane off the lease and I simply wish to eliminate them and that’s beginning. So I believe we’ll –and additionally nonetheless have airways taking a look at funding to part out of my older property and purchase newer property. Then I’ll do a sale leaseback. So I believe the market alternative goes to be good due to that. It’s not the all-time low steels that we’d have seen in 2020, however will probably be good costs which have numerous upside and I believe can be extra quantity.

Ariel RosaBank of America — Analyst

So inside that Joe, any expectation on type of what the portfolio appears like when it comes to property by the top of the yr.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Well, we have — traditionally we have invested between $300 million and $500 million in property a yr I’d suspect can be in that vary, doubtlessly increased however that is extra episodic. Tt’s more durable projecting. Maybe by the top of this yr, individuals can be doing extra of those cleanup trades as I mentioned. So I believe that that is nonetheless good, a great quantity to plan with.

Ariel RosaBank of America — Analyst

Okay, nice. That’s actually useful. And then simply turning to Jefferson, congratulations on finishing pipeline development with Motiva. Just clearly constructing a pipeline implies a long-term dedication. I simply wished to get a greater understanding of the way you’re enthusiastic about structuring these contracts with Exxon and Motiva and the way you guys are enthusiastic about that long-term dedication and possibly how the way you’re type of anticipating the short-term advantages balanced towards type of these the longer-term outlook for the pipeline.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. The purpose is to get 5 to 10-year contracts and the primary few offers we did have been shorter as a result of we wished to get –the first deal we did with Exxon was a three-year deal on refined merchandise, then we have constructed six pipelines and we did not actually have a lot in dedication. Now we’re speaking about extending these phrases as I mentioned between 5 and 10 years and including numerous quantity to it for contracts between 5 and 10 years. Motiva, we did the primary deal we did on the storage and contractors are million barrels of storage. And the deal is structured in order that if we by no means constructed the pipeline, the time period on he storage was three years. But after we full the pipeline the storage contracts modified from three years to 5 years. So that is precisely what they wished. They wished to piping [Phonetic] constructed as a result of that is extra environment friendly for them and save them cash. So I believe that is the purpose is 5 to 10-year contracts. There’s clearly typically we’ll do a shorter deal to get to get in and get began and then search for progress which normally occurs, and that is the great thing about this enterprise is normally individuals go, they add issues. They do not take issues away when you’re wired in and when you’re arrange.

The different market they have been nonetheless — Canadian market has been on and off market and it is kind of not best since you do not wish to simply hold transferring barrels when that arb is open. So the important thing to that I believe is the DRU. The DRU makes it a ratable circulation and if individuals put money into lots of of hundreds of thousands of {dollars} within the DRU it will possibly solely transfer by rail. So there, I believe you may get 10-year contracts and there’s one which’s been constructed that had a 10-year contract and we predict extra can be constructed. So, ideally, I’d like to rework that Canadian transfer right into a 10-year fastened contract, which I believe is doable, and I believe we’re nearer to that than ever earlier than.

Ariel RosaBank of America — Analyst

Got it. All very thrilling when it comes to the prospects for Jefferson. Thanks for the time.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Thanks.

Operator

Your subsequent query comes from the road of Brandon Oglenski from Barclays. Your line is open.

Brandon OglenskiBarclays — Analyst

Hey, good morning and thanks for taking the query. Joe, I wished to return again to $450 million steering for aviation EBITDA this yr as a result of I believe within the again half of the yr would truly suggest one thing nearer like $150 million run fee for 3Q and 4Q. Do we have now our math off there and possibly what are we lacking?

Scott ChristopherChief Financial Officer

No, it is clearly — Yes. If we have now, we had $60 million in Q1, let’s name it greater than $80 million in Q2, is you are near $150 million you get the $450 million, that is $300 million. So you are going to do — you are going to give you $300 million within the again half of the yr.

Joseph P. AdamChairman of the Board and Chief Executive Officer

That is right.

Brandon OglenskiBarclays — Analyst

I assume is it utilization within the fleet. Or are you able to communicate extra to how you are going to receives a commission on this module best with Lockheed as a result of we do perceive it is a partnership so the place do you generate the income and EBITDA alternative from that?

Joseph P. AdamChairman of the Board and Chief Executive Officer

So each modules swaps or trade or sale, we’re estimating $0.5 million or extra in EBITDA, so we predict that there’s potential for that. We have 43 modules in stock proper now and we anticipate that we’d hope to show these ceaselessly so it’s, and a few of the revenue and clearly comes from that however we even have the Chromalloy three way partnership and we have now the AAR a part of our enterprise as nicely, in order that the USM the AAR deal on the half out has been very nicely acquired and is definitely totally operational now and we have now turned I consider like seven engines. So it’s — And AAR may be very proud of it and there’s massive — there’s numerous demand for USM. So actually it is all of these issues that will probably be elevated line, which generates much more upkeep reserves from the portfolio. It can be Chromalloy, will probably be AAR, will probably be the module manufacturing unit and then will probably be that a part of our enterprise all mixed.

Brandon OglenskiBarclays — Analyst

Okay. So, nonetheless assured that the complete yr can be $450 million. It’s not like an exit fee of $450 million.

Joseph P. AdamChairman of the Board and Chief Executive Officer

No, no.

Brandon OglenskiBarclays — Analyst

Okay, understood. Yeah. And then I assume simply final one for me, Joe. Strategically infrastructure has clearly been the one which we have been ready to get fairly stable contribution from over time. Just questioning if the cryptocurrency alternative, clearly, it may very well be very profitable for you, however I believe that may contain one other capital outlay and introduce volatility. So, is that the proper step ahead, particularly as you consider doubtlessly separating the corporate sooner or later?

Joseph P. AdamChairman of the Board and Chief Executive Officer

Well, I do assume when you consider that enterprise, the combination with low price power is to me very compelling. And in order that’s type of what drove us to consider that’s after we take into consideration the very best and finest use for electrical energy it is that is $150 a megawatt hour right this moment versus 30 for[Phonetic] industrial actions. So it truly is, I do not know precisely the place that can go, however it felt like price exploring and figuring it out in order that we will, as a result of we do have an asset. We had a few of the individuals coming to us saying they wish to use our asset and they wished to make all the cash. So I believe, nicely it isn’t that tough to bind machines inside the enterprise. So why do not we make the cash and then see the place that leads us whether or not that is a separate exercise or the place it evolves or the way it turns into it simply felt like a great — we have now the most effective property on the planet for that exercise proper now and it occurred to be, we bought fortunate that it is truly coming on-line in August with Bitcoin at $50,000. So it was actually — it is a little bit opportunistic in that sense, and the way it evolves into infrastructure and how individuals take into consideration as TBD [Phonetic] It’s not that’s, it isn’t that a lot of the capital outlay and paybacks are beneath two years. So I believe we’re breakeven on getting the cash again and Bitcoin is like $20,000. So, and you may cease the exercise to maintain doing and anyone will say though it is actually unstable, volatility is damaging and it is like nicely I do not know if Bitcoin goes by $100,000, we’ll have all of our a refund in a few months. So why is that dangerous.

Brandon OglenskiBarclays — Analyst

I respect the response.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Thanks.

Operator

[Operator Instructions] Your subsequent query comes from Devin Ryan for from JMP Securities. Your line is open.

Devin RyanJMP Securities — Analyst

Okay, nice. Good morning. Most questions have been requested, however I wish to ask one simply in regards to the dividend. I believe earlier than the pandemic, there was numerous speak about progressing the dividend or a minimum of transferring towards a rise. And yeah, clearly previously yr, I believe was a great reminder round capital and doubtlessly over capitalization and the power to be opportunistic as that you just guys clearly have been. And so simply possibly to speak briefly about the way you guys are enthusiastic about the trajectory of the dividend, simply type of taking that in consideration. Also simply the truth that there so many compelling alternatives to deploy capital again into the enterprise for progress proper now. So simply, yeah, it is type of ideas have modified revolved round that.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yeah. It hasn’t actually modified. Obviously, we’re seeking to keep a 2 to 1 protection and towards the again half of this yr with the numbers we’re taking a look at, we’d be better than that. So we’d doubtlessly — that may put us able the place we might be in search of a dividend improve. So we have not modified our philosophy on the dividend.

Devin RyanJMP Securities — Analyst

Okay, nice. And then only one final follow-up right here on Long Ridge actually fascinating dialog on crypto particularly you are type of given your clear power angle. So I believe it makes numerous sense. Do you’ve got, I assume it is early however, is the intention to carry good type of Bitcoin past reduce working prices. Have you guys type of thought that by. If you are snug holding on the steadiness sheet or for those who simply wish to promote it as you mine if there’s type of consideration there. And then, I’m assuming that with this type of elevated alternative this in all probability pushes off the ideas round promoting the remaining stake in Long Ridge or doubtlessly possibly does not make delicate in any respect to the extent there’s a terrific type of newer alternative. So simply possibly a little bit bit extra taste for that as nicely.

Joseph P. AdamChairman of the Board and Chief Executive Officer

So there’s lots there, as you may think about, we have — I imply our base case proper now could be to promote the cash that we mine as we mine them, however it clearly is one thing that we must always take into consideration when it comes to purchase, promote, maintain and we have now — however our base case plan is to promote as we mine them that is the best way we take a look at the mannequin so far, however clearly there’s flexibility there. In phrases of whether or not it accelerates or not the disposition, it is actually a valuation challenge, I imply if we take a look at a few of the different public comps that do not stack up in addition to we do the valuations are astounding. So I do not know whether or not what it does to our timeline on holding. It actually is — it is arduous to know.

Devin RyanJMP Securities — Analyst

Yeah. I perceive numerous transferring components, however very fascinating. So I respect you taking my questions.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Thanks.

Operator

Your subsequent query comes from the road of Frank Galanti from Stifel. Your line is open.

Frank GalantiStifel — Analyst

Great, thanks very a lot. I wished to dig into the PMA enterprise a little bit bit and type of ask in regards to the — if there’s been any progress on acceptance of the half from the broader neighborhood. I assume particularly what number of components have been offered, I imply what number of have been put into your engines thus far. And then what number of engines have you ever repaired within the Montreal facility and what share of that has been yours?

Joseph P. AdamChairman of the Board and Chief Executive Officer

So then it is precise specifics on each a type of questions, however we have now — within the Montreal facility, every thing that we have inducted is ours so it isn’t for third celebration. So we’re utilizing that for our personal. Our personal property are in there, and I consider there have been like 30 engines inducted one thing like that. I imply. Yeah, let me get you a precise quantity on that, however these are all our engines the PMA we have now ordered units. I believe we, beneath 10 units of the veins, so — and these, I do not know if any of these have but been put in. I imply we have now them — we have acquired them say a month in the past and we’re planning the set up of these as we have now outlook for the remainder of the yr when it comes to store visits, so I do not know that there are a few different airways have additionally ordered these components from Chromalloy and I haven’t got the precise sense as to the place I do know one among them has been put in, however I do not know the standing of all of these deliveries thus far.

Frank GalantiStifel — Analyst

No, I believe you bought most of it. I assume simply following up on that the Montreal facility, you mentioned roughly, 30 directionally is ok, however the intention for that’s over time to have third-party engines in there, right, along with your individual?

Joseph P. AdamChairman of the Board and Chief Executive Officer

Well, once you say third celebration, I imply we’d be — so the stock of modules that we have now are all in Montreal. They’re all 43 R engines. So these are — so we’re not managing store visits for different individuals at that facility. Those are R engines that we personal.

Frank GalantiStifel — Analyst

Okay, that is useful. And then type of switching gears a little bit bit to the Jefferson facility, with the pipeline accomplished and a little bit little bit of progress doubtlessly of North with the DRU, do you’ve got like a base case long-term profitability outlook for that asset, proper, with a number of hundred million {dollars} invested, I assume what do you take a look at as like a base and upside case for what these property may realistically earn.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Well, I believe we have indicated that we consider primarily based on the property we have now right this moment. We may generate $150 million of EBITDA out sooner or later. And on this yr clearly we projected it round in such we’d be exiting the yr at $80 million. So, then it is a query of the way you layer in that incremental enterprise and when it’s kicked in in 2022 or 2023. How do you — what is the ramp on that, we do not, we have not given a particular quarter by quarter estimate on that.

Frank GalantiStifel — Analyst

Okay. No, these normal numbers are high quality. And one final query if I may. Can you give us an replace on capex wants for the corporate, exterior of extra engine purchases, proper, that $170 million LOI, what capex is required to type of hold the Aviation enterprise working and how does that examine. So, like how does this yr type of a bizarre yr in comparison with a extra normalized surroundings. And then what extra capex is required on the different three infrastructure tasks?

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yeah. So, a method we have talked the upkeep capex is for those who have been to do the store visits for each engine that we personal when it is because of be completed, which isn’t one thing you essentially should do. We estimate that to maintain that totally working completely could be about $50 million each year of funding per yr. So consider upkeep capex and the present aviation property is roughly $50 million. The second a part of it’s the capital expenditure packages we had for Long Ridge, Repauno and Jefferson are actually behind us. So aside from new contracts that we’d get, we do not actually have vital capex at people who these investments right this moment, however we’re hoping we can have capex that is not a nasty factor. It’s simply we’d solely do it to broaden and develop at this level. And then clearly the largest one could be, if we spend Repauno with extra say for example 3 million barrels of storage, which is what we’re kind of our goal variety of underground storage caverns that may be one other $300 million of capital. But we consider that we may generate $150 million in EBITDA from that. So that is the largest one that’s on the market remaining. But it isn’t dedicated at this level.

Frank GalantiStifel — Analyst

And I assume simply on Long Ridge on the Bitcoin Investment, what is the capEx necessities for the assorted tasks like that 20 million, sorry 20 megawatt energy. How a lot do it’s worthwhile to put in mining gear to —

Joseph P. AdamChairman of the Board and Chief Executive Officer

We bought $70 million [Phonetic] I believe. So the primary 2 million first 2 megawatts represents about I believe 630 machines and there are about 11,000, 12,000 right this moment, very elevated worth. So if it is roughly about 7 million for this funding that we’re making in August and could be 10 occasions that if we wished to go to twenty million and we even have 50-50 associate at Long Ridge. So we might anticipate that to be halved.

Frank GalantiStifel — Analyst

Sure. Yeah, that is smart. Great. Thank you for the time. Really respect it.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Thanks.

Operator

We have a query coming from the road of Rob Salmon from Wolfe Research. Your line is open.

Robert SalmonWolfe Research — Analyst

So simply to piggyback on the dialogue when it comes to Bitcoin, are you able to give us a way of what the sensitivity is to altering in Bitcoin costs to what sort of promote annualized EBITDA could be for those who’re pondering, whether or not you wish to speak in regards to the 2 we’re speaking in regards to the 20. Just so we will get a way of how that may impression our fashions. If we see costs generate both upwards or downwards.

Scott ChristopherChief Financial Officer

Yes, so I may communicate to that. Yes, so simply if have been to take a sensitivity of what, let’s name it 10% a yr worth deep whether or not this is a rise or lower it is about, name it, $12 million of impression to EBITDA impression in both course on the 20 megawatts. So I believe Joe touched on that right this moment’s Bitcoin costs, it is a few $45 million per yr EBITDA improve of 20 megawatts and so for those who knew Bitcoin worth up or down, let’s name it $12 million a yr of EBITDA impression.

Robert SalmonWolfe Research — Analyst

Thanks, Scott. That’s actually useful. And I assume the opposite type of actual fast follow-up that I had is with regard to the Aviation expectations for the second quarter. Can you give us a way of what you’ve got constructed into the mannequin from upkeep income perspective that is clearly been actually depressed previously couple of — the previous two quarters, in addition to type of the opposite income contributions from the JV, simply so we all know if we’re seeing a greater underlying demand surroundings, simply so we will type of higher sensitize our fashions for both upside or draw back there.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Yes. So the upkeep exercise we’re seeing a giant uptick in upkeep and flying hours in April. So name it might in all probability 30%, 40% improve in upkeep income from Q1 to Q2. And that is simply April, which we do not know clearly the remainder of the quarter but. And then what was the second query?

Robert SalmonWolfe Research — Analyst

I used to be simply curious how contribution for upkeep versus different income. But that type of provide you with a solution the sensitivity there.

Joseph P. AdamChairman of the Board and Chief Executive Officer

That nook we do [Indecipherable].

Robert SalmonWolfe Research — Analyst

Okay. I actually respect the time and follow-up guys.

Scott ChristopherChief Financial Officer

Yeah, it is in all probability order of magnitude 10 million or so from that in Q2, up from negligible in Q1.

Robert SalmonWolfe Research — Analyst

Makes sense. Thank you.

Scott ChristopherChief Financial Officer

Thanks.

Operator

I’m exhibiting no additional questions presently. I want to flip it again to Mr Alan Adreini for any additional feedback.

Alan AndreiniHead of Investor Relations

Thank you, Patricia. And thanks all for taking part in right this moment’s convention name. We sit up for updating you after Q2. Thanks.

Joseph P. AdamChairman of the Board and Chief Executive Officer

Thanks.

Operator

[Operator Closing Remarks]

Duration: 81 minutes

Call contributors:

Alan AndreiniHead of Investor Relations

Joseph P. AdamChairman of the Board and Chief Executive Officer

Unidentified Speaker

Scott ChristopherChief Financial Officer

Josh SullivanBenchmark Company — Analys

Guiliano BolognaCompass Point — Analyst

Christian WetherbeeCiti — Analyst

Robert SalmonWolfe Research — Analyst

Justin LongStephens — Analyst

Robert DoddRaymond James — Analyst

Ariel RosaBank of America — Analyst

Brandon OglenskiBarclays — Analyst

Devin RyanJMP Securities — Analyst

Frank GalantiStifel — Analyst

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