On August 9, 2024, New Fortress Energy Inc (NFE, Financial) released its 8-K filing detailing its financial results for the second quarter of 2024. New Fortress Energy is an integrated gas-to-power company that spans the entire production and delivery chain from natural gas procurement and liquefaction to logistics, shipping, terminals, and conversion or development of natural gas-fired generation.
Performance Overview
New Fortress Energy Inc (NFE, Financial) reported an adjusted EBITDA of $120 million for Q2 2024, significantly below the analyst estimate of $275 million. The company also posted a net loss of $87 million and an adjusted EPS of $(0.41), missing the analyst estimate of $0.60 per share. Revenue for the quarter came in at $428 million, falling short of the estimated $701.33 million.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Revenue | $428 million | $690.3 million | $561.3 million |
| Net Income (Loss) | $(87) million | $56.7 million | $120.1 million |
| Diluted EPS | $(0.44) | $0.26 | $0.58 |
| Adjusted EBITDA | $120 million | $340.1 million | $246.5 million |
Challenges and Future Outlook
The company's performance was significantly impacted by delays in placing its FLNG 1 project into service, which was originally expected to occur at the beginning of the second quarter. This delay resulted in an estimated $150 million per quarter in lost operating margin. However, the FLNG 1 project is now operational as of July 19, 2024, and is expected to contribute positively in the upcoming quarters.
"Our Adjusted EBITDA in the second quarter of $120 million was well below our expectation of $275 million. This was largely the result of delays in placing our FLNG 1 project into service, which was originally expected to occur at the beginning of the second quarter," said Wes Edens, Chairman and CEO of New Fortress Energy.
Financial Achievements
Despite the challenges, New Fortress Energy Inc (NFE, Financial) completed several significant transactions, including the sale of power plants developed for FEMA in Puerto Rico and an 80 TBtu island-wide gas contract awarded in March 2024. These transactions are expected to support growth in Adjusted EBITDA in the coming quarters.
The company also completed its initial Fast LNG asset located offshore Altamira, Mexico, with a production capacity of 1.4 MTPA. This project is expected to play a pivotal role in supplying low-cost, clean LNG to the company's downstream terminal customers.
Income Statement Highlights
For the second quarter of 2024, New Fortress Energy Inc (NFE, Financial) reported total revenues of $428 million, a decrease from $690.3 million in the first quarter of 2024. Operating expenses for the quarter were $383.7 million, resulting in an operating income of $44.3 million. Interest expense was $80.4 million, and other expenses totaled $47.4 million, leading to a net loss of $87 million.
Balance Sheet and Cash Flow
As of June 30, 2024, the company had a strong balance sheet with significant investments in infrastructure and assets. The company intends to refinance all its 6.75% senior secured notes due September 2025 in the near term, which could provide additional financial flexibility.
Conclusion
While New Fortress Energy Inc (NFE, Financial) faced significant challenges in the second quarter of 2024, the completion of the FLNG 1 project and other strategic transactions position the company for future growth. Investors will be keen to see how these developments impact the company's financial performance in the coming quarters.
Explore the complete 8-K earnings release (here) from New Fortress Energy Inc for further details.
