On November 8, 2023, New Fortress Energy Inc (NFE, Financial) announced its financial results for the third quarter of 2023, revealing a mix of strategic achievements and financial performance. The company reported an Adjusted EBITDA of $208 million for the quarter and $895 million for the first nine months of the year. Net income for the quarter was $62 million, contributing to a nine-month total of $334 million. Adjusted EPS for Q3 2023 was $0.30, with a cumulative $1.78 for the first three quarters.
Financial Performance Overview
New Fortress Energy Inc (NFE, Financial) has made significant strides in transitioning its earnings composition, with nearly 100% of Q3 Adjusted EBITDA generated by contracted downstream assets. The company's strategic focus remains on operations, cash generation, and deleveraging, as highlighted by the CEO Wes Edens. NFE has identified approximately $1 billion in non-core asset sales to support this strategy and reiterated its Illustrative Adjusted EBITDA Goals for 2023 and 2024 at $1.6 billion and $2.4 billion, respectively.
Operational Highlights
Operational achievements include the transition to core infrastructure, with nearly all Q3 earnings coming from contracted downstream assets. In Puerto Rico, NFE operated 150 MW of power at Palo Seco with 98% utilization since May 2023 and added another 200+ MW in San Juan in September. The company also completed the sailaway, installation, and First Gas for its first FLNG asset offshore Altamira, Mexico, and signed an FSRU charter to start operations in Santa Catarina, Brazil, in January 2024.
Financial Details and Tables
The financial highlights table shows a decrease in revenues from $561.3 million in Q2 2023 to $514.5 million in Q3 2023. Despite this, the Ships Segment Operating Margin slightly increased from $54.4 million to $54.9 million in the same period. The Terminals and Infrastructure Segment Operating Margin decreased from $239.4 million to $194.7 million quarter-over-quarter.
For the detailed financials, the condensed consolidated statements of operations indicate that while net income per share remained consistent at $0.30 from Q2 to Q3 2023, there was a notable decrease in net income from $120.1 million in Q2 to $62.3 million in Q3. The Adjusted EBITDA also saw a decrease from $246.5 million in Q2 to $208.4 million in Q3 2023.
Analysis of Company's Performance
NFE's performance in Q3 2023 reflects a strategic pivot towards contracted downstream assets, which is expected to provide more stable and predictable earnings. The company's efforts to deleverage through non-core asset sales and the reduction in capital expenditures signal a prudent approach to financial management. However, the decrease in net income and Adjusted EBITDA quarter-over-quarter will be an area for investors to monitor closely.
For additional information, investors and interested parties are encouraged to review the presentation posted on the Investors section of New Fortress Energy’s website and the company’s most recent Annual Report on Form 10-K.
Management will host an earnings conference call to discuss the Q3 2023 results and provide further insights into the company's performance and strategy.
New Fortress Energy Inc (NFE, Financial) continues to focus on strengthening its financial position and operational efficiency, aiming to deliver long-term value to its shareholders and contribute to global energy security and sustainability.
Explore the complete 8-K earnings release (here) from New Fortress Energy Inc for further details.
