New Fortress Energy Inc. (NFE)·Q3 2024 Earnings Summary

Executive Summary

• Q3 2024 revenue rose 32.6% sequentially to $567.5M and 10.3% year over year, with Adjusted EBITDA of $176.2M—essentially inline with management’s $175M target; diluted EPS was $0.03 and Adjusted EPS $0.05 .
• Management cut FY 2024 “Illustrative Adjusted EBITDA Goal” from $1.4–$1.5B (Q2 guide) to $855M and indicated modest Q4 guidance reductions due to FLNG maintenance and lower volumes—key narrative shift toward liquidity and deleveraging .
• Corporate refinancing advanced: exchanging ~$2.7B senior secured notes out to 2029 and extending $900M of the revolver to 2027; plus a $400M equity raise to bridge to positive FCF in 2025 .
• Strategic options: exploring partners, asset sales/JVs across Brazil, Puerto Rico, Jamaica, Mexico, Nicaragua and FLNG 1 to delever and simplify the story; DOE granted Non‑FTA export approval for FLNG 1 (1.4 MTPA, 5 years) .
• Dividend risk: payment of the previously declared $0.10 dividend was delayed pending noteholder agreement, highlighting near-term capital prioritization over distributions .

What Went Well and What Went Wrong

What Went Well

• “Strong and steady third quarter…Adjusted EBITDA of $176 million, matching our guidance of $175 million,” driven by steady terminal demand and initial Fast LNG cargos at nameplate production .
• FLNG 1 reached first LNG in July; executed first partial cargo in August and first full cargo in September; commissioning showed 14 days at ~105% of nameplate, with expected cargo cadence ~18–20 days, underpinning supply integration .
• Liquidity actions: ~$2.7B note exchange to 2029, revolver extension to 2027, and $400M equity raise to bridge to positive FCF; management expects 2025 cash generation to be positive after unfunded capex and debt service .

What Went Wrong

• FY 2024 Adjusted EBITDA goal cut to $855M vs prior $1.4–$1.5B, with Q4 guidance reduced due to FLNG maintenance (lower volumes) .
• Total Segment Operating Margin fell vs Q2 and Q3 2023 (partly from deferred earnings dynamics and lower terminal margin), and SG&A contained non-cash items and transaction costs; net income remained modest at $11.3M .
• Dividend payment delayed pending agreement with noteholders, signaling shareholder return constraints amid refinancing efforts .

Financial Results

Segment Operating Margin ($USD Thousands):

Selected KPIs:

Estimate comparison: Wall Street consensus via S&P Global was unavailable at the time of analysis due to data access limits; comparisons to consensus could not be made.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “This has been a strong and steady third quarter…Adjusted EBITDA of $176 million, matching our guidance of $175 million…result of steady volume demand from our terminals and the addition of Fast LNG cargos…liquefier reached nameplate production.” — Wes Edens, Chairman & CEO .
• “We refinanced and extended out 100% of the 2025 corporate debt, 2/3 of the 2026s into a single class and then extended the vast majority of the revolvers to 2027…completed a $400 million equity raise…bridging the Company to positive free cash flow.” — Wes Edens .
• “Prior to the maintenance event, we ran for 14 days…about 105% of nameplate capacity…we’re completing our fourth cargo…buffer storage provides…operational flexibility; expect no downtime.” — Wes Edens .
• “Core SG&A for the third quarter was $26 million, down for the third consecutive quarter…better approximates what we will be running on a go forward basis in 2025.” — CFO Chris Guinta .

Q&A Highlights

• FLNG 2 timing and permits: ability to pace capex; strong CFE support in Mexico; permits pending over next ~90 days; potential bundling synergies with FLNG 1 .
• Puerto Rico volumes: 53 TBtu 2025 base vs >100 TBtu potential; new Governor publicly supportive of gas-fired conversions; near-term conversions expected to accelerate .
• Fleet economics: FSRU market remains strong; recharter opportunities (e.g., Eskimo) could deliver material EBITDA uplift .
• Cash generation: 2025 positive free cash flow expected after unfunded capex, debt service, taxes; net capex ~$70M in 2025 with committed project financings .
• Logistics cadence: target ~18–20 days per cargo; buffer storage enables minimal downtime despite swells/weather .

Estimates Context

• S&P Global/Capital IQ consensus estimates (EPS and revenue for Q3 2024 and prior quarters) were unavailable due to data access limits during this analysis; we therefore cannot quantify beats/misses versus Wall Street consensus at this time.
• Given management’s Q3 outcome matched internal guidance ($175M Adjusted EBITDA) and directional Q4 reduction, we expect estimates will need to reflect: lower FY 2024 EBITDA, softer Q4 volumes, and improved 2025 FCF trajectory grounded in lower Core SG&A and asset-level financing .

Key Takeaways for Investors

• Near-term: The FY 2024 EBITDA cut to $855M and Q4 guidance reduction are headwinds; focus on execution of FLNG cadence and Brazil construction milestones as potential stock sentiment stabilizers .
• Medium-term deleveraging: Refinancing to 2029, revolver extension to 2027, and asset/JV exploration set up deleveraging; successful asset monetizations could re-rate equity by simplifying the sum-of-parts .
• FLNG reliability: Evidence of >100% nameplate runs and DOE export approval broaden marketability; consistent 18–20 day cargo cycles are a key KPI to watch .
• Puerto Rico optionality: Base case volumes conservative; policy support and diesel‑to‑gas conversions create upside beyond 53 TBtu—monitor conversion approvals and Genera execution .
• SG&A discipline/FCF: Core SG&A trending to ~$25M/quarter and net capex largely project‑financed underpin positive 2025 FCF prospects .
• Fleet economics: FSRU recharters are a tangible EBITDA lever amid tight regas capacity markets—look for charter announcements .
• Dividend posture: Payout is deferred pending lender agreement; treat dividends as contingent until refinancing fully closes .