• Adjusted EBITDA: $176 million for Q3 2024.
• Net Income: $9 million GAAP net income, $0.03 per share; adjusted net income of $11 million, $0.05 per share.
• Total Segment Operating Margin: $220 million for Q3 2024.
• Core SG&A: $26 million for Q3 2024.
• Funds from Operations: $46 million, $0.22 per share for Q3 2024.
• Gross CapEx Forecast for 2025: $815 million, with $745 million funded through committed debt facilities.
• Equity Raise: Completed a $400 million equity raise.
• Debt Refinancing: Refinanced and extended 100% of 2025 corporate debt, 2/3 of 2026 debt into a single class, and extended most revolvers to 2027.
• Construction Update: Brazil's Shell 2 plant 80% complete; Port of Zen project 25% complete, ahead of schedule.

• Warning! GuruFocus has detected 8 Warning Signs with NFE.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• New Fortress Energy Inc (NASDAQ:NFE) reported Q3 adjusted EBITDA of $176 million, aligning with previous forecasts.
• The company successfully sold and transported its first full cargo to Europe, marking a significant operational milestone.
• NFE completed a $400 million equity raise, enhancing liquidity and extending debt maturities, allowing for strategic growth.
• The Brazil construction projects are on track, with the Shell 2 plant 80% complete and the Port of Zen project ahead of schedule.
• NFE's refinancing efforts have extended debt maturities and increased corporate liquidity by $727 million, providing financial flexibility.

Negative Points

• NFE reduced its Q4 guidance due to maintenance issues affecting FLNG volumes, indicating potential operational challenges.
• The resolution of a FEMA claim remains pending, creating uncertainty around its financial impact.
• The company's ability to forecast away from operations is complex due to large individual transactions and strategic options.
• NFE's Puerto Rico operations are currently underutilized, with a significant gap between potential and actual gas supply.
• The company faces regulatory and administrative hurdles in Mexico, affecting the progress of FLNG 2.

Q & A Highlights

Q: What is the status of FLNG 2, and how are you managing CapEx and regulatory approvals? A: Christopher Guinta, CFO: We have the ability to manage CapEx timing to control cash flows, which is why expected CapEx for FLNG 2 has decreased. Our relationship with Mexico remains strong, and we expect regulatory permits to be issued in the next 90 days. The expected CapEx will resume full spend rates in January, with contracts in place for module and civil construction.

Q: Can you provide an update on Puerto Rico's power plant conversions and the expected gas demand? A: Wesley Edens, CEO: The new administration in Puerto Rico is supportive of gas conversions, which should lead to significant activity in the next few months. The current guidance of 53 TBtus is a base case and does not reflect the full market opportunity, which could be much larger with the expected conversions.

Q: How does the company plan to achieve stable, recurring operations by 2026? A: Wesley Edens, CEO: Our plan is to provide gas and power in markets with deficits, creating stable, long-term cash flows with no commodity risk. Many of our projects are complete or nearing completion, and we believe they are worth more as infrastructure investments. Selling one or two assets could significantly deleverage the company.

Q: How does the current FSRU market impact your operations, and what are the opportunities for subchartering? A: Wesley Edens, CEO: The FSRU market remains strong, with a premium on regas capacity. We have surplus FSRUs that could be chartered at higher rates, providing a potential uplift to EBITDA. We expect to report on these opportunities soon.

Q: What is the outlook for free cash flow in 2025, considering CapEx and EBITDA projections? A: Christopher Guinta, CFO: With an illustrative adjusted EBITDA of $1.3 billion for 2025 and net CapEx of $70 million, we expect positive free cash flow after debt service and taxes. This will support debt reduction efforts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.