New Fortress Energy publishes Q2 2023 results

U.S. energy infrastructure company New Fortress Energy (NFE) has revealed its financial results and business achievements for the second quarter of 2023.

Illustration only; Archive; Courtesy of New Fortress Energy (NFE)

The company reported adjusted EBITDA of $246 million in the second quarter of 2023 and $686 million in the first half of 2023, as well as net income of $120 million in the second quarter of 2023 and $272 million in the first half of 2023.

Since the first quarter of 2023, NFE said it has achieved several milestones, including the installation of the first rig for FLNG 1 at Altamira, Mexico, and targeting commercial operation date (COD) in the third quarter of 2023, as well as the completion of 135 MW La Paz power plant, Mexico, and 3 mtpa Barcarena terminal, Brazil.

Specifically, in regard to Altamira, NFE stated it has mechanically completed each of the modules and three rigs on FLNG 1, with its pioneer III rig successfully installed offshore in August. The company expects to complete and install the remaining two FLNG rigs in August and introduce first gas and achieve COD in September.

As for the Barcarena terminal, NFE informed the first gas is on schedule for the end of 2023, upon the arrival of FSRU, which is currently being converted from an LNG carrier.

Construction of the 605 MW power plant at Barcarena is more than 20% completed, pursuant to a fixed-price, date-certain EPC contract with Mitsubishi and Toyo Setal, NFE noted, adding that operations are expected to commence in the third quarter of 2025, pursuant to 25-year PPAs with Brazilian distribution companies.

To note, the company also said it is in the process of finalizing an agreement to sell the 135 MW La Paz power plant to Comisión Federal de Electricidad (CFE), Mexico, for approximately $180 million, with the transaction close expected in the first quarter of 2024.

On the subject of hydrogen, NFE said that the construction of its first hydrogen plant, with an initial capacity of 100 MW or approximately 46 tons per day, is progressing on schedule, with the first production expected in the fourth quarter of 2024 and COD in the first quarter of 2025.

Furthermore, the company pointed out that it has several U.S. green hydrogen projects in various stages of development.

NFE also stated it is expecting an increase in earnings and a decrease in capex in the second half of 2023 through 2024, adding that the composition of earnings is expected to transition as more than 85% of 2024 illustrative adjusted EBITDA guidance will be generated from core infrastructure and only 15% from cargo sales, with 84% from investment grade counterparts. NFE’s corporate strategy focus will be on operations, cash generation and deleveraging.

“We are at an exciting period in the company’s history as we near the end of our large-scale buildout with more than $3.2 billion of high-quality, contracted projects entering service over the next 90 days. We expect a significant increase in free cash flow as these projects enter service and capital expenditures decline. Our focus is on significantly growing cash flows from our portfolio, operational execution, deleveraging and low-cost, high-return organic growth opportunities,” said Wes Edens, Chairman and CEO of New Fortress Energy.

To remind, NFE owns and operates natural gas and LNG infrastructure and an integrated fleet of ships and logistics assets to deliver turnkey energy solutions to global markets.

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