New Fortress Energy Inc. (NFE)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 was significantly ahead of company guidance: Adjusted EBITDA of $313.5M vs guidance of $200–$220M, driven by FLNG optimization and recognition of deferred earnings from forward cargo sales . GAAP diluted EPS was $(1.11) due largely to a $260.3M loss on extinguishment of debt tied to the refinancing .
• The FLNG 1 asset was placed into service for accounting purposes in December and has been operating smoothly; management cited 12 cargoes shipped (~24 TBtu) and production above nameplate capacity in January, positioning 2025 EBITDA at a reaffirmed $1.0B (ex-FEMA) .
• Balance sheet de-risking advanced: $2.7B senior secured notes due 2029 completed in Q4, extending maturities and adding ~$300M liquidity; revolver extended to 2027; subsequent TLB upsize of $425M and $350M in Brazil notes further bolstered liquidity .
• Puerto Rico: NFE extended the 80 TBtu island-wide gas contract and eliminated the PREPA O&M incentive in exchange for a $110M payment, clearing the path for diesel-to-gas conversions (925 MW) that management believes will accelerate volumes in 2025–2026 .
• Street consensus (S&P Global) for Q4 2024 was unavailable via our access; vs-estimates comparisons are therefore not presented. Company beat internal EBITDA guidance materially. Values retrieved from S&P Global were unavailable during this session.

What Went Well and What Went Wrong

• What Went Well

  • FLNG execution: “FLNG 1 asset is performing above nameplate... highest production milestone was achieved in January when we reached approximately 120% of nameplate capacity” and 12 cargoes (~24 TBtu) shipped to date, supporting outsized Q4 EBITDA and 2025 visibility .
  • Guidance/cash: Reaffirmed 2025 Adjusted EBITDA of $1.0B (ex-FEMA); projected YE’25 cash >$1.2B after asset sale deleveraging and FEMA proceeds, reflecting strong liquidity planning .
  • Balance sheet progress: $2.7B 2029 secured notes completed, $300M added liquidity; $900M revolver extended; post quarter $425M TLB upsize and $350M Brazil notes issuance—management targets asset sales ($2B net) to further delever .

• What Went Wrong

  • GAAP loss from refinancing: Q4 net loss $(223.5)M and diluted EPS $(1.11) largely from $260.3M loss on extinguishment of debt, obscuring underlying operational strength .
  • PREPA incentive accounting reversal: Prior recognition of ~$58M fuel-savings incentives in Q2–Q3 was reversed due to the new agreement structure; while cash was received, EBITDA recognition was deferred, necessitating a brief 10-K filing delay to ensure proper presentation .
  • Core SG&A uptick: Core SG&A rose to $34.5M in Q4 (from $25.7M in Q3) due to transaction-related professional fees, though management guides ~$/qtr $30M in 2025 .

Financial Results

Segment operating margin breakdown (trend):

Full-year comparison:

KPIs and other items:

Guidance Changes

Other notable updates impacting forward view:

• Puerto Rico: 1-year extension of 80 TBtu island-wide gas contract; PREPA O&M incentive removed for a $110M payment, facilitating conversion push and volume upside .
• Financing: $2.7B 2029 notes completed in Q4; revolver extended; post quarter $425M TLB upsize and $350M Brazil notes .

Earnings Call Themes & Trends

Management Commentary

• Strategic positioning: “We were confirming our guidance of $1 billion for this year... We think by just focusing on our current markets, we have an opportunity in the next 2 years to grow EBITDA by 50% or more” .
• FLNG performance: “Our FLNG 1 asset is performing above nameplate... reached approximately 120% of nameplate capacity [in January]” .
• Puerto Rico strategy: “We decided on this compromise. They pay us $110 million. We agreed to eliminate the incentives... Together, we then try to take the island off of diesel and fuel oil” .
• Capital structure: “$4.775 billion later... The balance sheet is in much better shape... We are poised to deleverage, simplify and grow the business” .

Q&A Highlights

• Hedging the LNG supply book: Majority of positions are sold or hedged; management chose to “derisk” open exposure while retaining upside, citing geopolitical volatility potential .
• Puerto Rico conversion timeline: Several plants are “gas-ready” and can switch quickly as regas units are deployed; conversions of 925 MW are a high priority and could double portfolio scale while saving $250–$500M/year for the island at current prices .
• Island-wide contract duration and pricing: Expect longer-term (10–20 year) structure going forward, likely moving from diesel-linked to Henry Hub-based pricing consistent with new build arrangements .
• 2025 guidance framework: $1.0B Adjusted EBITDA excludes any FEMA claim; management kept FEMA separate to avoid nonrecurring uplift in the guide .
• Asset sales trajectory: Jamaica is first focus; process in final stages with multiple parties; proceeds earmarked to retire debt and simplify the structure .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 EPS/revenue was unavailable via our access at this time; as a result, we cannot present vs-consensus comparisons. In-lieu, we note NFE’s Adjusted EBITDA of $313.5M meaningfully exceeded its own $200–$220M guidance for the quarter .
• Implications: Given the Q4 beat and FLNG performance ramp, street models may revisit 2025 EBITDA mix (ex-FEMA) and Puerto Rico volume cadence as conversions accelerate; management reaffirmed the $1.0B guide (ex-FEMA) and outlined >$1.2B YE’25 cash under their plan .

Key Takeaways for Investors

• Core operations outperformed: Q4 Adjusted EBITDA of $313.5M materially beat company guidance, powered by FLNG optimization and recognition of deferred cargo sales .
• FLNG is a structural earnings driver: Asset is in service and producing above nameplate; 12 cargoes (~24 TBtu) shipped supports 2025 visibility and portfolio optimization .
• Balance sheet momentum: Refinancing extended maturities to 2029; revolver to 2027; further TLB/Brazil issuances post quarter, with ~$2B asset sales expected to accelerate deleveraging in 2025 .
• Puerto Rico conversions likely to unlock volumes: 1-year contract extension plus $110M incentive restructuring clears a path for rapid diesel-to-gas switching across 925 MW .
• 2025 guide de-risked (ex-FEMA): $1.0B Adjusted EBITDA reaffirmed; management modeling includes >$1.2B YE’25 cash given targeted asset sales and expected FEMA cash inflow .
• Watch near-term catalysts: Jamaica asset sale outcome; Brazil CELBA COD ramp in 2H’25; Brazil auctions in June; Puerto Rico conversion starts and longer-tenor contract structure .
• Trading lens: Positive skew from operational beats and de-leveraging catalysts, tempered by GAAP noise from refinancing and timing of FEMA resolution .

Appendix: Primary Sources

• Q4’24 press release and 8-K: financials, segment margins, EBITDA reconciliation, cash/liquidity, Puerto Rico updates .
• Q4’24 earnings call: guidance, FLNG performance, Puerto Rico conversions, asset sales, Brazil construction, hedging details .
• Other relevant press releases (Q4’24): Financing updates and FSRU charter .
• Prior quarters (for trend): Q3’24 and Q2’24 results press releases and Q3’24 call .