FTAI Infrastructure (FIP) Q1 2025: Long Ridge Consolidation Adds $120M Non-Cash Gain, Resets EBITDA Run Rate

2025-05-09 | By EarningsIQ Research

Long Ridge’s consolidation and refinancing have materially reset FIP’s earnings base, with annualized EBITDA now tracking above $330 million and more upside from new contracts and data center negotiations. Strategic execution at Rapano and Jefferson is also delivering new contracted EBITDA, while Transtar’s pipeline of third-party rail opportunities signals incremental growth without major capital needs. As FIP enters a pivotal year, investors should watch for contract conversions, data center deals, and the impact of regulatory and macro forces on the evolving infrastructure portfolio.

Summary

• Long Ridge Consolidation Drives Inflection: Full ownership and refinancing at Long Ridge are transforming earnings power and visibility.
• Contracted EBITDA Expands Across Portfolio: Rapano and Jefferson secure new long-term contracts, locking in future cash flows.
• Strategic Optionality Ahead: Data center negotiations and rail M&A position FIP for additional upside beyond current run rate.

Performance Analysis

FTAI Infrastructure’s first quarter marked a structural shift, with the consolidation of Long Ridge following the acquisition of the remaining 49.9% partner interest. This move generated a $120 million non-cash gain and reset the company’s financial reporting, with adjusted EBITDA up 21% sequentially and 29% year-over-year, now tracking above $330 million on an annualized basis when including incremental locked-in EBITDA from executed agreements. Importantly, the Q1 results only partially reflect the impact of Long Ridge’s consolidation and refinancing, with full run-rate contributions expected from Q2 onward.

Segment performance was mixed but strategically aligned. Transtar, the rail business, delivered steady EBITDA as U.S. steel volumes held firm despite tariff noise, and management highlighted a pipeline of over a dozen third-party opportunities representing $10 million in annual EBITDA with minimal capital outlay. At Jefferson, storage tank transitions temporarily weighed on results, but new contracts commencing in Q2 will restore and grow EBITDA. Rapano’s Phase II transloading project advanced, with $80 million in annual EBITDA now contracted or under LOI, and financing for the build-out underway. Balance sheet leverage remains elevated at $2.8 billion in total debt, but most is non-recourse at the asset level, and upcoming refinancing at the corporate level is expected to lower fixed charges and enhance cash flow.

• Long Ridge Run Rate Reset: March EBITDA annualized to $130 million, with June capacity revenues to lift run rate to $160 million.
• Rapano Phase II Locked In: Three contracts and LOIs secure $80 million annual EBITDA, with upside from Phase I utilization.
• Transtar Growth Pipeline: Over a dozen third-party rail projects identified, with $10 million EBITDA potential requiring little incremental capital.

FIP’s earnings base is now structurally higher, with contract-driven, recurring EBITDA and a clear line of sight to further growth from both internal initiatives and external opportunities.

Executive Commentary

Strategic Positioning

1. Long Ridge as a Core Value Engine

Long Ridge, FIP’s power and gas asset, is now fully consolidated and has become the company’s largest EBITDA contributor. The refinancing and acquisition of the minority stake reset the asset’s economics, and the March run rate ($10 million EBITDA for the month) points to $160 million annualized from June, with additional upside from a 20 MW up-rate and data center development. Management’s focus on “behind-the-meter” projects and data center negotiations could add $70 million or more in incremental EBITDA, leveraging Long Ridge’s unique power infrastructure and grid connectivity.

2. Contracted Growth at Rapano and Jefferson

Rapano, the NGL transloading and storage business, has locked in $80 million in annual EBITDA for Phase II through multi-year contracts and a letter of intent, with Phase III development pending regulatory approval expected soon. Jefferson, the terminal and storage asset, is transitioning storage tanks to higher-value contracts, with $25 million in new annual EBITDA commencing in 2025. Both assets benefit from minimum volume commitments, enhancing cash flow predictability.

3. Transtar’s Incremental Rail Opportunity

Transtar, FIP’s rail platform, maintains steady core volumes but is poised for incremental EBITDA from over a dozen identified third-party projects. These opportunities, spanning new freight, transloading, and mechanical services, are expected to be “sticky” and require minimal capital, reflecting a capital-light growth lever. M&A remains a priority to diversify commodities and expand the platform.

4. Balance Sheet and Capital Recycling

FIP’s balance sheet strategy centers on asset-level, non-recourse debt and opportunistic refinancing. The upcoming Rapano financing and planned corporate bond refinancing are positioned to reduce fixed charges and enhance distributable cash flow. Transstar remains debt-free, while Long Ridge and Jefferson carry asset-level debt aligned with contracted cash flows.

5. Optionality from Macro and Regulatory Tailwinds

Macro factors, including tariffs and U.S. energy export policy, are creating optionality for FIP’s export-facing assets. Rapano and Jefferson are positioned to benefit from increased U.S. energy flows to Europe, while Transtar could see upside if U.S. steel exports accelerate. Regulatory fast-tracking of Long Ridge’s up-rate and potential data center deals add further optionality without requiring major new capital deployment.

Key Considerations

FTAI Infrastructure’s portfolio repositioning is yielding tangible results, but execution risk and external forces remain material. Investors should focus on the following:

Key Considerations:

• Long Ridge Data Center Upside: Data center negotiations could drive $70 million or more in incremental EBITDA, but timing and structure remain uncertain.
• Rapano Phase II and III Execution: Timely completion of financing, construction, and permitting is critical to realizing contracted EBITDA and future growth.
• Jefferson Contract Conversion: New contracts are set to lift EBITDA, but additional wins in crude, refined, and renewable products could push results above current guidance.
• Transtar Third-Party Ramp: Success in converting identified rail opportunities will test the platform’s commercial agility and cost discipline.
• Balance Sheet Flexibility: Planned refinancing must deliver on cash flow enhancement and support future capital allocation priorities.

Risks

Execution on contract conversions, project financing, and data center deals will determine whether FIP meets its elevated EBITDA targets. Regulatory delays, macro volatility (especially tariffs and energy policy), and customer concentration in key segments could introduce downside. Leverage remains high, though largely non-recourse, and refinancing must be accretive to support dividend growth. External shocks to energy or steel markets could also impact volumes and pricing power across the portfolio.

Forward Outlook

For Q2 2025, FIP expects:

• Full run-rate EBITDA contribution from Long Ridge consolidation and refinancing
• Incremental EBITDA from Jefferson’s new storage contracts (commencing April 1st)

For full-year 2025, management reaffirmed a target of:

• Annualized EBITDA over $330 million based on locked-in contracts, with line of sight to $400 million if new opportunities are converted

Management highlighted several factors that will drive results:

• Data center negotiations and potential contract signings at Long Ridge
• Completion of Rapano Phase II financing and commencement of construction

Takeaways

FTAI Infrastructure’s Q1 marks a structural step-up in earnings power, with Long Ridge consolidation, new contracts at Rapano and Jefferson, and a robust pipeline of incremental opportunities. The company is now positioned for a transformational year, but must execute on contract conversions and project delivery to meet elevated guidance.

• EBITDA Base Reset: Long Ridge and new contracts have structurally raised FIP’s earnings power, with further upside from data center deals and rail pipeline execution.
• Execution Remains Key: Success hinges on delivering contracted projects, converting pipeline opportunities, and managing leverage through accretive refinancing.
• Macro and Regulatory Tailwinds: Energy export policy, tariffs, and regulatory approvals will shape the pace and scale of future growth and capital allocation.

Conclusion

FTAI Infrastructure enters 2025 with a reset earnings base and clear visibility into further EBITDA growth from locked-in contracts and strategic initiatives. Investors should monitor the pace of contract conversions, the outcome of data center negotiations, and the impact of macro and regulatory developments on the evolving infrastructure portfolio.

Industry Read-Through

FIP’s results signal a broadening opportunity set for U.S. infrastructure owners positioned at the intersection of energy, logistics, and digital transformation. The rapid ramp in contracted EBITDA at export-facing assets like Rapano and Jefferson reflects strong demand for U.S. energy infrastructure, while Long Ridge’s pivot toward data centers highlights the sector’s convergence with digital infrastructure. Rail operators with embedded access to industrial customers may see similar incremental growth opportunities, especially if macro tailwinds favor U.S. exports. Across the sector, success will hinge on securing long-term contracts, managing capital intensity, and capitalizing on regulatory and policy-driven demand shifts.

FIP Industrials Infrastructure Energy Exports Data Centers Rail Contracted EBITDA Refinancing