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NF

New Fortress Energy Inc. (NFE)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was a reset quarter with core operations intact but no one-offs: revenue fell to $470.5M, Adjusted EBITDA to $82.3M, and diluted EPS to $(0.73); vs Q1 2024, revenue declined 31.9% and Adjusted EBITDA fell 75.8% .
  • The company closed the $1.055B sale of Jamaica assets, committing proceeds to debt reduction ($270M revolver, $55M Term Loan A) and liquidity, and outlined a shift toward asset‑level financing backed by 20‑year supply and demand contracts .
  • Management raised 2025 “EBITDA plus gains” guidance to $1.25–$1.5B, driven by expected FEMA proceeds, FSRU sub‑charters/novations, Genera incentive payment, and Brazil/Nicaragua ramp, while reiterating core SG&A at ~$30M/quarter .
  • Key operating headwinds included lower downstream volumes, higher gas costs (weighted average cost per MMBtu rose from $8.75 in Q4 2024 to $9.57 in Q1 2025), and increased vessel costs; Henry Hub index pricing used to invoice customers rose 63% YoY .
  • Stock reacted sharply: law firm releases cite a 62.98% drop to $4.27 on May 15 following results; Nasdaq later notified NFE of a filing delay for its Form 10-Q, which NFE expects to resolve without delisting impact .

What Went Well and What Went Wrong

What Went Well

  • Closed the $1.055B Jamaica sale with ~$778M net proceeds and a ~$$430M expected book gain, accelerating deleveraging and balance sheet simplification .
  • Strategic pivot to asset‑level financing: matched long‑duration LNG supply (FLNG and Venture Global SPAs) to 20‑year demand contracts, underpinning ~$500M annual margin potential and setting up refinancing of corporate debt over the next ~12 months .
  • FLNG 1 fully commissioned and producing reliably; optimization outage planned to lift throughput further; Brazil CELBA project ~95% complete and expected to begin earnings in Q3 2025, with PortoCem >50% complete .

Notable management quotes:

  • “Our goal is the quality versus quantity of the earnings… repeatable, easy to understand and very long duration cash flows” .
  • “We expect to start generating earnings from the CELBA power plant in the third quarter of this year. These developments are fully funded with asset-level debt” .
  • “The asset level financing… has got the ability to refinance a significant portion of the balance sheet, if not all of it” .

What Went Wrong

  • No one‑time gains in Q1; “quality…was high, but the quantity was lower than we were initially forecasting”—Adjusted EBITDA fell to $82.3M as downstream volumes dropped and cargo sale boosts did not recur .
  • Cost pressure: weighted average cost of gas rose to $9.57/MMBtu (from $8.75 in Q4 2024), vessel costs +$12.3M YoY; Henry Hub invoicing index up 63% YoY; downstream volumes 25% lower QoQ and 37% lower YoY .
  • PREPA island‑wide gas extension revised from 1 year to 100 days to allow an RFP, increasing near‑term contract duration uncertainty (though management expects longer-term solutions) .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$690.3 $679.0 $470.5
Net income (loss) ($USD Millions)$56.7 $(223.5) $(197.4)
Diluted EPS ($USD)$0.26 $(1.11) $(0.73)
Adjusted EBITDA ($USD Millions)$340.1 $313.5 $82.3
Adjusted EBITDA Margin (%)49.2% (340.1/690.3) 46.2% (313.5/679.0) 17.5% (82.3/470.5)
Total Segment Operating Margin ($USD Millions)$384.3 $240.2 $106.0

Segment breakdown

Segment Operating Margin ($USD Millions)Q1 2024Q4 2024Q1 2025
Terminals & Infrastructure$350.1 $206.1 $74.6
Ships$34.2 $34.1 $31.4
Total$384.3 $240.2 $106.0

KPIs and cost drivers

KPI / Cost DriverQ4 2024Q1 2025
Cash & cash equivalents ($USD Millions)$492.9 $447.9
Restricted cash ($USD Millions)$472.7 $379.5
Total cash balance ($USD Millions)$966.0 $827.0
Unrestricted cash ($USD Millions)$493.0 $448.0
Interest expense ($USD Millions)$99.5 $213.7
Core SG&A ($USD Millions)$34.5 $34.1
Weighted avg cost of gas purchased ($/MMBtu)$8.75 $9.57
Henry Hub index pricing used to invoice – YoYn/a+63% vs Mar 2024
LNG inventory weighted avg cost ($/MMBtu)$6.90 $8.73
Cargo sales costs ($USD Millions)$53.9 $103.8
Delivered volumes change—−25% QoQ; −37% YoY

Estimate comparison (Wall Street consensus – S&P Global)

MetricQ1 2025 ActualQ1 2025 Consensus*Surprise
Revenue ($USD Millions)$470.5 $614.5*−$144.0M (−23.4%)
Adjusted EBITDA ($USD Millions)$82.3 $221.0*−$138.7M
Diluted EPS ($USD)$(0.73) $(0.053)*−$0.68

*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA (ex-FEMA)FY 2025~$1.0B (Q4 call) Reiterated focus on core earnings; not explicitly updated in Q1Maintained (no explicit change)
EBITDA plus gainsFY 2025Not specified$1.25–$1.5B (includes FEMA, FSRU subcharters/novations, Genera incentive) Raised
Core SG&AFY 2025~$30M per quarter ~$30M per quarter Maintained
CELBA (Brazil) COD/earnings start2H 20252H 2025 COD Earnings start expected Q3 2025 Clarified (earlier in 2H)
Use of Jamaica proceedsQ2/Q3 2025 actionsPay down per waterfall (75% to super priority debt) $270M RCF, $55M TLA paydown; retain ~$400M for liquidity after amendments Updated application
PREPA island-wide gas supply20251-year extension Revised to 100-day extension to run RFP Lowered duration (structure reset)

Earnings Call Themes & Trends

TopicQ3 2024 (Prior‑2)Q4 2024 (Prior‑1)Q1 2025 (Current)Trend
FLNG performanceNameplate reached; first cargos; portfolio optimization FLNG 1 placed into service; producing above nameplate; 12 cargos shipped; procurement savings Fully commissioned; optimization outage planned to increase capacity Improving throughput, stable operations
Asset sales & deleveragingExploring sales/partners across regions Targeting ~$2B asset sale proceeds in 2025; capital markets raised liquidity Jamaica sale closed; proceeds redeployed; moving to asset‑level financing Executed; pivot to securitization
Puerto Rico – gas conversions & contractsHighlighted conversions, savings potential 80 TBtu extension announced; Genera incentive restructured for $110M payment Extension amended to 100 days; RFP expected; longer‑duration goal; large conversion opportunity Contract structure reset, still strategic
Brazil – CELBA & PortoCemFacilities advancing; auctions upcoming CELBA 88% complete; PortoCem ahead of schedule CELBA ~95% complete; earnings start Q3; PortoCem >50% complete On track; near-term monetization
Liquidity & capital structureRefinancing plan outlined $2.7B 2029 notes; $425M TLB; liquidity >$1B projected >$1.1B pro forma liquidity post-Jamaica; plan to refinance corporate debt entirely via asset-level cash flows Strengthening; lower-cost, longer duration
Regulatory/legal—PREPA incentive accounting adjustments; late filing notice explained Nasdaq notice of late 10-Q; expects consistency with released numbers Administrative, being addressed

Management Commentary

  • “Material events… Jamaica sale, $1.055 billion… translates into about $800 million in net proceeds of $430 million gain” .
  • “What we are looking to generate… repeatable… very long duration cash flows… assets alone generate $500 million in annual margin” .
  • “Goal would be to refinance the corporate balance sheet in its entirety over the course of the next 12 months” .
  • “In Brazil… CELBA plant ~95% complete… expect to start generating earnings… in the third quarter” .
  • “FLNG asset has been fully commissioned… increasing available liquefaction capacity through optimization projects” .

Q&A Highlights

  • Liquidity and restricted cash: Majority restricted to Brazil CELBA/PortoCem capex; ~$40–$50M tied to other credit instruments, ~$30M to be freed by Jamaica transaction .
  • Capital structure actions: Pursuing asset‑level financing using 20‑year supply/demand contracts to refinance corporate debt; may retire bonds at discounts opportunistically .
  • Puerto Rico short-term power RFP: Unitized power price bids required (equipment plus fuel), no minimum dispatch; emergency power least attractive economically vs conversions/new build .
  • CELBA payments: ~$25M/year capacity payment; bulk payments in second semester; linkage to ~18 TBtu/year usage; no fixed capacity at 100% take‑or‑pay volumes .
  • Capex outlook: Brazil projects fully funded via restricted cash; Nicaragua remaining $50–$60M; pacing FLNG 2 spend to preserve liquidity while addressing near-term maturities .

Estimates Context

  • Q1 2025 missed consensus materially: revenue $470.5M vs $614.5M*, Adjusted EBITDA $82.3M vs $221.0M*, EPS $(0.73) vs $(0.053)*—reflecting lower volumes, higher gas costs, and absence of one‑offs .
  • Consensus inputs were thin (Revenue # of estimates = 1; EPS # of estimates = 3*), suggesting limited coverage; expect downward revisions to near-term EBITDA and EPS until Brazil CELBA/PortoCem, FSRU novations, and potential FEMA proceeds accrue.
  • Management raised full-year “EBITDA plus gains” to $1.25–$1.5B, which may bifurcate analyst models between core Adjusted EBITDA and non‑recurring/transactional gains .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core operations steady but smaller in Q1 absent one‑offs; watch for CELBA earnings in Q3 and PortoCem capacity payments in 2026 to re‑expand run‑rate EBITDA .
  • Strategic deleveraging is real: Jamaica proceeds deployed; pivot to asset‑level financing backed by long-duration contracts could reset cost of capital and extend maturities materially .
  • Puerto Rico is a large multi‑year gas‑to‑power expansion opportunity (conversions and new build), but near-term contract structure is being re-baselined via RFP; expect volatility until longer‑duration agreements land .
  • Cost/inflation pressures are visible (Henry Hub +63% YoY indexing, higher gas costs/ship costs); margin recapture hinges on volume ramp and FLNG optimizations .
  • Trading: Q1 print triggered a significant selloff; subsequent clarity on liquidity (post‑Jamaica) and explicit roadmap to refinance could be catalysts for re‑rating as milestones hit (CELBA COD, financing updates) .
  • Medium term: If asset‑level financing succeeds and Brazil/Puerto Rico growth is contracted, the portfolio’s 20‑year margin streams could support lower leverage and improved equity valuation multiple .
  • Risk watch: Execution on refinancing, timing/amount of FEMA claim, regulatory processes in PR/Brazil, and commodity price volatility remain key sensitivities .