New Fortress Energy Announces Third Quarter 2023 Results
- Adjusted EBITDA of $208 million in Q3 2023
- Net income of $62 million in Q3 2023
- Achieved milestones in Puerto Rico, FLNG asset completion, FSRU charter, and power plant construction progress
- Expecting increased earnings and reduced capex in Q4 2023
- Identified $1 billion in non-core asset sales for deleveraging
- None.
Summary Highlights
-
Adjusted EBITDA(1) of
$208 million $895 million
-
Net income of
$62 million $334 million
-
Adjusted EPS(2) of
$0.30 $1.78
- Achieved several milestones since the second quarter of 2023
-
transitioned earnings from predominantly open cargos to nearly
100% contracted downstream assets(3);
-
operated 150 MW in
Palo Seco ,Puerto Rico at98% utilization, and placed another 200+ MW into service inSan Juan, Puerto Rico in September at near full utilization(4);
-
completed sailaway, installation, and First Gas(5) for our first FLNG asset located offshore
Altamira, Mexico ;
-
signed FSRU charter to start operations in
Santa Catarina in January 2024(6);
-
achieved COD(4) at our 135 MW power plant in
La Paz ;
-
signed definitive documents for up to
$575 million 37% completed and on-schedule for COD(4) in the third quarter of 2025(6);
-
Expecting an increase in earnings and decrease in capex beginning in the fourth quarter of 2023 as we place approximately
$3.0 billion
-
Identified approximately
$1 billion
-
Illustrative Adjusted EBITDA Goals(10) for 2023 and 2024 reiterated at
$1.6 billion $2.4 billion 85% of 2024 Illustrative Adjusted EBITDA Goals(10) generated from core downstream infrastructure(3)
- Corporate strategy continues to focus on operations, cash generation, and deleveraging
"Our transition to core infrastructure has begun as nearly
Earnings Composition
-
Composition of earnings is transitioning as nearly
100% of third quarter Adjusted EBITDA was generated by contracted downstream assets; we expect more than85% of 2024 Illustrative Adjusted EBITDA Goals(10) will be generated from core infrastructure(3)
-
Operated(4) 150 MW of power at our
Palo Seco ,Puerto Rico location at approximately98% utilization since May 2023 COD, and placed another 200+ MW into service inSan Juan, Puerto Rico in September at near full utilization within first week of COD(6)
Fast LNG
-
Completed sailaway, installation, and First Gas(5) for our first FLNG asset in offshore
Altamira, Mexico ; First LNG(5) and COD(4) expected by the end of the fourth quarter 2023
Terminals and Power
-
Signed FSRU charter with Petrobras to start operations in
Santa Catarina in January 2024(6);Santa Catarina is expected to serve a significantly undersupplied gas power market in southernBrazil
-
La Paz power plant achieved COD(4) in the third quarter of 2023(6)
- Barcarena terminal is complete with First Gas(5) to Norsk Hydro(12) on schedule for end of year 2023(6) upon the arrival of our FSRU, which is currently being converted from an LNG carrier
-
Construction(7) of our 630 MW power plant at Barcarena is
37% completed(4) pursuant to a fixed-price, date-certain EPC contract with Mitsubishi and Toyo Setal; Operations(4) are expected to commence in the third quarter of 2025(6) pursuant to 25-year PPAs with Brazilian distribution companies
Hydrogen (ZeroParks)
-
Entered into a definitive hydrogen supply agreement with OCI Global in September for
100% of our first project's output; this agreement allows us to expand the scope of our first project from 100 MW to 200 MW, with first bubbles(4) expected in the fourth quarter of 2024(6), phase 1 COD(4) of 100 MW in the first quarter of 2025(6), and phase 2 COD(4) of another 100 MW by year end 2025(6)
- Signed a definitive agreement with Electric Hydrogen Co. (EH2) for the supply of EH2’s flagship PEM electrolysis technology
-
We have several other
U.S. green hydrogen projects in various stages of Development(7) with a focus on sites with strategic logistics, low-cost power, and strong regional hydrogen demand
Financing
-
In October, we closed a
$856 million 5.00% , which was used to repay the$400 million
-
In November, we closed
$575 million
Dividend
-
Common dividend(14) of
$0.10
-
On November 7, 2023, NFE’s Board of Directors approved a dividend of
$0.10
Financial Highlights
|
Three Months Ended |
||||
(in millions) |
June 30, 2023 |
|
September 30, 2023 |
||
Revenues |
$ |
561.3 |
|
$ |
514.5 |
Net income |
$ |
120.1 |
|
$ |
62.3 |
Diluted EPS |
$ |
0.58 |
|
$ |
0.30 |
Adjusted net income(15) |
$ |
119.2 |
|
$ |
61.2 |
Adjusted EPS(2) |
$ |
0.58 |
|
$ |
0.30 |
Terminals and Infrastructure Segment Operating Margin(16) |
$ |
239.4 |
|
$ |
194.7 |
Ships Segment Operating Margin(16) |
$ |
54.4 |
|
$ |
54.9 |
Total Segment Operating Margin(16) |
$ |
293.8 |
|
$ |
249.7 |
Adjusted EBITDA(1) |
$ |
246.5 |
|
$ |
208.4 |
Please refer to our Q3 2023 Investor Presentation (the “Presentation”) for further information about the following terms:
1)“Adjusted EBITDA,” see definition and reconciliation of this non-GAAP measure in the exhibits to this press release.
2) “Adjusted EPS” is not a measurement of financial performance under GAAP and should not be considered in isolation or as an alternative to any measure of performance or liquidity derived in accordance with GAAP. We calculate Adjusted EPS as Adjusted Net Income (Note 16 below) divided by the weighted average shares outstanding on a fully diluted basis for the period indicated. We believe this non-GAAP measure, as we have defined it, offers a useful supplemental view of the overall evaluation of the Company in a manner that is consistent with metrics used for management’s evaluation of the Company’s overall performance. Adjusted EPS does not have a standardized meaning, and different companies may use different definitions. Therefore, this term may not be necessarily comparable to similarly titled measures reported by other companies.
3) “Downstream assets” or “contracted downstream assets” or “contracted terminals” represents all our earnings, revenues and all other financial metrics related to our Ships Segment and Terminals and Infrastructure Segment, excluding cargo sales and certain derivative transactions that we believe are associated with cargo sales.
4) “Online”, “Operational”, "Operating", "Completion", "Completed", “COD” or “commercial operation date”, “Deployment” or similar statuses (either capitalized or lower case) with respect to a particular project means we expect gas to be made available in the near future, gas has been made available to the relevant project, or that the relevant project is in full commercial operations. Where gas is going to be made available or has been made available but full commercial operations have not yet begun, full commercial operations will occur later than, and may occur substantially later than, our reported Operational, Completion or Deployment date, and we may not generate any revenue until full commercial operations have begun. We cannot assure you if or when such projects will reach full commercial operation. Our ability to export liquefied natural gas depends on our ability to obtain export and other permits from governmental and regulatory agencies. No assurance can be given that we will receive required permits, approvals and authorizations from governmental and regulatory agencies in connection with the exportation of liquefied natural gas on a timely basis or at all or that, once received, we will be able to maintain in full force and effect, renew or replace such permits, approvals and authorizations.
5) “First Gas” or “First LNG” refers to the date on which (or, for future dates, management's current estimate of the date on which) natural gas and/or LNG is expected for a project, including a facility in development. Full commercial operation of such project will occur later than, and may occur substantially later than, the date of first gas or first LNG. We cannot assure you if or when such projects will reach the date of delivery of first gas or LNG, or full commercial operations.
6) Lead times and expected development times used in this Presentation indicate our internal evaluations of a project’s expected timeline. They refer to us completing certain stages of projects within a timeframe and within a spectrum of budget parameters that, when taken as a whole, are substantially consistent with our business model. These timeframes include assumptions regarding items that are outside our control, including permitting, weather, supply of equipment and materials, and other potential sources of delay. To the extent that projects have not yet started or are currently under development, we can make no assurance that such projects are on track within the timeline parameters we establish. Additionally, the construction of facilities is inherently subject to the risks of cost overruns and delays. If we are unable to construct, commission, complete and operate any of our facilities as expected, or, when and if constructed, any of them do not accomplish our goals, estimates regarding timelines, budget and savings could be materially and adversely affected.
7) “Under Construction”, “Development,” “In Development” or similar statuses means that we have taken steps and invested money to develop a facility, including execution of agreements for the development of the project (subject, in certain cases, to satisfaction of conditions precedent), procuring land rights and entitlements, negotiating or signing construction contracts, and undertaking active engineering, procurement and construction work. Our development projects are in various phases of progress, and there can be no assurance that we will continue progress on each development as we expect or that each development will be Completed or enter full commercial operations. There can be no assurance that we will be able to enter into the contracts required for the development of these facilities on commercially favorable terms or at all. If we are unable to enter into favorable contracts or to obtain the necessary regulatory and land use approvals on favorable terms, we may not be able to construct these assets as expected, or at all. Additionally, the construction of facilities is inherently subject to the risks of cost overruns and delays.
8) For future periods, Capex or net Capex reflects management’s estimate of total expected cash payments in such period less cash proceeds received by the Company for related asset sales or direct asset financings. Investors are encouraged to review the related GAAP financial measures, and not to rely on any single financial measure to evaluate our business. “Gross capex” includes all expected cash payments in such period without deducting related asset sales or direct asset financings.
9) Represents management's current assumptions related to the ability to complete non-core asset sales of approximately
10) “Illustrative Adjusted EBITDA Goal” means our forward-looking goal for Adjusted EBITDA for the relevant period and is based on the "Illustrative Total Segment Operating Margin Goal" less illustrative Core SGA assumed to be at
11) Reserved
12) The contract is with a subsidiary of Norsk Hydro.
13) Reserved
14) The payment of dividends under the dividend policy will be made at the discretion of the Board and will be subject to the Board's final determination based on a number of factors, including, but not limited to, the Company's financial performance, its available cash resources, the terms of its indebtedness, its cash requirements, credit rating impacts, alternative uses of cash that the Board may conclude would represent an opportunity to generate a greater return on investment for the Company, and restrictions and other factors the Board deems relevant at the time it determines to declare such dividends. The dividend policy may be revised, suspended, or cancelled at the discretion of the Board at any time.
15) “Adjusted Net Income” means Net Income attributable to stockholders as presented in the relevant Form 10-K or Form 10-Q for the relevant financial period as adjusted by non-cash impairment charges or losses on disposal of our assets.
16) “Total Segment Operating Margin” is the total of our Terminals and Infrastructure Segment Operating Margin and Ships Segment Operating Margin. "Terminals and Infrastructure Segment Operating Margin" included our effective share of revenue, expenses and operating margin attributable to our
Additional Information
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investors section of New Fortress Energy’s website, www.newfortressenergy.com, and the Company’s most recent Annual Report on Form 10-K, which is available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
Earnings Conference Call
Management will host a conference call on Wednesday, November 8, 2023 at 8:00 A.M. Eastern Time. The conference call may be accessed by dialing (888) 204-4368 (toll free from within the
A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.newfortressenergy.com within the "Investors" tab under “Events & Presentations.” Please allow extra time prior to the call to visit the website and download any necessary software required to listen to the internet broadcast. A replay of the conference call will be available at the same website location shortly after the conclusion of the live call.
About New Fortress Energy Inc.
New Fortress Energy Inc. (Nasdaq: NFE) is a global energy infrastructure company founded to help address energy poverty and accelerate the world’s transition to reliable, affordable, and clean energy. The company owns and operates natural gas and liquefied natural gas (LNG) infrastructure and an integrated fleet of ships and logistics assets to rapidly deliver turnkey energy solutions to global markets. Collectively, the company’s assets and operations reinforce global energy security, enable economic growth, enhance environmental stewardship and transform local industries and communities around the world.
Cautionary Statement Concerning Forward-Looking Statements
This press release contains certain statements and information that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than historical information are forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance or our projected business results. You can identify these forward-looking statements by the use of forward-looking words such as “expects,” “may,” “will,” “can,” “could,” “should,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “believes,” “schedules,” “progress,” “targets,” “budgets,” “outlook,” “trends,” “forecasts,” “projects,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” or the negative version of those words or other comparable words. Forward looking statements include: our expectation regarding raising external capital; our earnings transition from predominantly open cargos to nearly
Exhibits – Financial Statements
Condensed Consolidated Statements of Operations For the three months ended June 30, 2023 and September 30, 2023
(Unaudited, in thousands of |
||||||||
|
For the Three Months Ended |
|||||||
|
June 30, 2023 |
|
September 30, 2023 |
|||||
Revenues |
|
|
|
|||||
Operating revenue |
$ |
494,619 |
|
|
$ |
420,868 |
|
|
Vessel charter revenue |
|
65,840 |
|
|
|
67,287 |
|
|
Other revenue |
|
886 |
|
|
|
26,307 |
|
|
Total revenues |
|
561,345 |
|
|
|
514,462 |
|
|
|
|
|
|
|||||
Operating expenses |
|
|
|
|||||
Cost of sales (exclusive of depreciation and amortization shown separately below) |
|
225,768 |
|
|
|
191,920 |
|
|
Vessel operating expenses |
|
11,443 |
|
|
|
11,613 |
|
|
Operations and maintenance |
|
33,697 |
|
|
|
60,819 |
|
|
Selling, general and administrative |
|
55,803 |
|
|
|
49,107 |
|
|
Transaction and integration costs |
|
1,554 |
|
|
|
2,739 |
|
|
Depreciation and amortization |
|
42,115 |
|
|
|
48,670 |
|
|
Total operating expenses |
|
370,380 |
|
|
|
364,868 |
|
|
Operating income |
|
190,965 |
|
|
|
149,594 |
|
|
Interest expense |
|
64,396 |
|
|
|
64,822 |
|
|
Other (income) expense, net |
|
(6,584 |
) |
|
|
(2,271 |
) |
|
Income before income from equity method investments and income taxes |
|
133,153 |
|
|
|
87,043 |
|
|
Income from equity method investments |
|
2,269 |
|
|
|
489 |
|
|
Tax provision |
|
15,322 |
|
|
|
25,194 |
|
|
Net income |
|
120,100 |
|
|
|
62,338 |
|
|
Net income attributable to non-controlling interest |
|
(852 |
) |
|
|
(1,117 |
) |
|
Net income attributable to stockholders |
$ |
119,248 |
|
|
$ |
61,221 |
|
|
|
|
|
|
|||||
Net income per share – basic |
$ |
0.58 |
|
|
$ |
0.30 |
|
|
Net income per share – diluted |
$ |
0.58 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|||||
Weighted average number of shares outstanding – basic |
|
205,045,121 |
|
|
|
205,032,928 |
|
|
Weighted average number of shares outstanding – diluted |
|
205,711,467 |
|
|
|
205,032,928 |
|
|
Adjusted EBITDA
For the three months ended September 30, 2023
(Unaudited, in thousands of
Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations, net income, cash flow from operating activities or any other measure of performance or liquidity derived in accordance with GAAP. We believe this non-GAAP measure, as we have defined it, offers a useful supplemental view of the overall operation of our business in evaluating the effectiveness of our ongoing operating performance in a manner that is consistent with metrics used for management’s evaluation of the Company’s overall performance and to compensate employees. We believe that Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation, and amortization which vary substantially from company to company depending on capital structure, the method by which assets were acquired and depreciation policies. Further, we exclude certain items from our SG&A not otherwise indicative of ongoing operating performance.
We calculate Adjusted EBITDA as net income, plus transaction and integration costs, contract termination charges and loss on mitigations sales, depreciation and amortization, asset impairment expense, interest expense, net, other (income) expense, net, loss on extinguishment of debt, changes in fair value of non-hedge derivative instruments and contingent consideration, tax expense, and adjusting for certain items from our SG&A not otherwise indicative of ongoing operating performance, including non-cash share-based compensation and severance expense, non-capitalizable development expenses, cost to pursue new business opportunities and expenses associated with changes to our corporate structure, plus our pro rata share of Adjusted EBITDA from certain unconsolidated entities, less the impact of equity in earnings (losses) of certain unconsolidated entities plus certain non-capitalizable contract acquisition costs.
Adjusted EBITDA is mathematically equivalent to our Total Segment Operating Margin, as reported in the segment disclosures within our financial statements, minus Core SG&A, including our pro rata share of such expenses of certain unconsolidated entities. Core SG&A is defined as total SG&A adjusted for non-cash share-based compensation and severance expense, non-capitalizable development expenses, cost of exploring new business opportunities and expenses associated with changes to our corporate structure. Core SG&A excludes certain items from our SG&A not otherwise indicative of ongoing operating performance.
The principal limitation of this non-GAAP measure is that it excludes significant expenses and income that are required by GAAP to be recorded in our financial statements. Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measure to our GAAP net income, and not to rely on any single financial measure to evaluate our business. Adjusted EBITDA does not have a standardized meaning, and different companies may use different Adjusted EBITDA definitions. Therefore, Adjusted EBITDA may not be necessarily comparable to similarly titled measures reported by other companies. Moreover, our definition of Adjusted EBITDA may not necessarily be the same as those we use for purposes of establishing covenant compliance under our financing agreements or for other purposes. Adjusted EBITDA should not be construed as alternatives to net income and diluted earnings per share attributable to New Fortress Energy, which are determined in accordance with GAAP.
The following table sets forth a reconciliation of net income to Adjusted EBITDA for the three months ended September 30, 2022, March 31, 2023, June 30, 2023, and September 30, 2023:
(in thousands) |
|
Three Months Ended September 30, 2022 |
|
|
Three Months Ended March 31, 2023 |
|
Three Months Ended June 30, 2023 |
|
Three Months Ended September 30, 2023 |
||||||||
Total Segment Operating Margin |
|
$ |
339,330 |
|
|
|
$ |
480,817 |
|
|
$ |
293,834 |
|
|
$ |
249,687 |
|
Less: Core SG&A (see definition above) |
|
|
47,290 |
|
|
|
|
41,067 |
|
|
|
47,381 |
|
|
|
41,289 |
|
Less: Pro rata share Core SG&A from unconsolidated entities |
|
|
1,293 |
|
|
|
|
14 |
|
|
|
— |
|
|
|
— |
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
290,747 |
|
|
|
$ |
439,736 |
|
|
$ |
246,453 |
|
|
$ |
208,398 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net income |
|
$ |
56,231 |
|
|
|
$ |
151,566 |
|
|
$ |
120,100 |
|
|
$ |
62,338 |
|
Add: Interest expense |
|
|
63,588 |
|
|
|
|
71,673 |
|
|
|
64,396 |
|
|
|
64,822 |
|
Add: Tax provision |
|
|
9,971 |
|
|
|
|
28,960 |
|
|
|
15,322 |
|
|
|
25,194 |
|
Add: Depreciation and amortization |
|
|
35,793 |
|
|
|
|
34,375 |
|
|
|
42,115 |
|
|
|
48,670 |
|
Add: SG&A items excluded from Core SG&A |
|
|
20,311 |
|
|
|
|
11,071 |
|
|
|
8,422 |
|
|
|
7,818 |
|
Add: Transaction and integration costs |
|
|
5,620 |
|
|
|
|
494 |
|
|
|
1,554 |
|
|
|
2,739 |
|
Add: Other (income) expense, net |
|
|
10,214 |
|
|
|
|
25,005 |
|
|
|
(6,584 |
) |
|
|
(2,271 |
) |
Add: Changes in fair value of non-hedge derivative instruments and contingent consideration |
|
|
(6,868 |
) |
|
|
|
111,140 |
|
|
|
(2,835 |
) |
|
|
(423 |
) |
Add: Loss on extinguishment of debt, net |
|
|
14,997 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Add: Pro rata share of Adjusted EBITDA from unconsolidated entities |
|
|
49,156 |
|
|
|
|
15,432 |
|
|
|
— |
|
|
|
— |
|
Add: Loss (income) from equity method investments |
|
|
31,734 |
|
|
|
|
(9,980 |
) |
|
|
(2,269 |
) |
|
|
(489 |
) |
Add: Contract acquisition cost |
|
|
— |
|
|
|
|
— |
|
|
|
6,232 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
290,747 |
|
|
|
$ |
439,736 |
|
|
$ |
246,453 |
|
|
$ |
208,398 |
|
Segment Operating Margin
(Unaudited, in thousands of
Performance of our two segments, Terminals and Infrastructure and Ships, is evaluated based on Segment Operating Margin. Segment Operating Margin reconciles to Consolidated Segment Operating Margin as reflected below, which is a non-GAAP measure. We define Consolidated Segment Operating Margin as GAAP net income, adjusted for selling, general and administrative expense, transaction and integration costs, contract termination charges and loss on mitigation sales, depreciation and amortization, asset impairment expense, interest expense, other (income) expense, loss on extinguishment of debt, net, (income) loss from equity method investments and tax (benefit) expense. Consolidated Segment Operating Margin is mathematically equivalent to Revenue minus Cost of sales minus Operations and maintenance minus Vessel operating expenses, each as reported in our financial statements.
Three Months Ended September 30, 2023 |
||||||||||||||||
(in thousands of $) |
Terminals and Infrastructure (1) |
|
Ships |
|
Total Segment |
|
Consolidation and Other (1) |
|
Consolidated |
|||||||
Segment Operating Margin |
$ |
194,743 |
|
$ |
54,944 |
|
$ |
249,687 |
|
$ |
423 |
|
$ |
250,110 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
49,107 |
|
|||||
Transaction and integration costs |
|
|
|
|
|
|
|
|
|
2,739 |
|
|||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
48,670 |
|
|||||
Interest expense |
|
|
|
|
|
|
|
|
|
64,822 |
|
|||||
Other (income) expense, net |
|
|
|
|
|
|
|
|
|
(2,271 |
) |
|||||
(Income) from equity method investments |
|
|
|
|
|
|
|
|
|
(489 |
) |
|||||
Tax provision |
|
|
|
|
|
|
|
|
|
25,194 |
|
|||||
Net income |
|
|
|
|
|
|
|
|
$ |
62,338 |
|
|||||
(1) |
Consolidation and Other also adjusts for the exclusion of the unrealized mark-to-market gain or loss on derivative instruments in our segment measure. |
Three Months Ended June 30, 2023 |
|||||||||||||||||
(in thousands of $) |
Terminals and Infrastructure (1) |
|
Ships |
|
Total Segment |
|
Consolidation and Other (1) |
|
Consolidated |
||||||||
Segment Operating Margin |
$ |
239,436 |
|
$ |
54,398 |
|
$ |
293,834 |
|
$ |
(3,397 |
) |
|
$ |
290,437 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
55,803 |
|
||||||
Transaction and integration costs |
|
|
|
|
|
|
|
|
|
1,554 |
|
||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
42,115 |
|
||||||
Interest expense |
|
|
|
|
|
|
|
|
|
64,396 |
|
||||||
Other (income) expense, net |
|
|
|
|
|
|
|
|
|
(6,584 |
) |
||||||
(Income) from equity method investments |
|
|
|
|
|
|
|
|
|
(2,269 |
) |
||||||
Tax provision |
|
|
|
|
|
|
|
|
|
15,322 |
|
||||||
Net income |
|
|
|
|
|
|
|
|
$ |
120,100 |
|
||||||
(1) |
The Company has excluded contract acquisition costs that do not meet the criteria for capitalization from the segment measure. Contract acquisition costs of |
Three Months Ended March 31, 2023 |
|||||||||||||||||
(in thousands of $) |
Terminals and Infrastructure |
|
Ships (1) |
|
Total Segment |
|
Consolidation and Other (2) |
|
Consolidated |
||||||||
Segment Operating Margin |
$ |
402,139 |
|
$ |
78,678 |
|
$ |
480,817 |
|
$ |
(126,586 |
) |
|
$ |
354,231 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
52,138 |
|
||||||
Transaction and integration costs |
|
|
|
|
|
|
|
|
|
494 |
|
||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
34,375 |
|
||||||
Interest expense |
|
|
|
|
|
|
|
|
|
71,673 |
|
||||||
Other (income) expense, net |
|
|
|
|
|
|
|
|
|
25,005 |
|
||||||
(Income) from equity method investments |
|
|
|
|
|
|
|
|
|
(9,980 |
) |
||||||
Tax provision |
|
|
|
|
|
|
|
|
|
28,960 |
|
||||||
Net income |
|
|
|
|
|
|
|
|
$ |
151,566 |
|
||||||
(1) |
Ships includes our effective share of revenues, expenses and operating margin attributable to our |
|
(2) |
Consolidation and Other adjusts for the inclusion of the effective share of revenues, expenses and operating margin attributable to |
Three Months Ended September 30, 2022 |
||||||||||||||||
(in thousands of $) |
Terminals and Infrastructure (1) |
|
Ships (2) |
|
Total Segment |
|
Consolidation and Other (3) |
|
Consolidated |
|||||||
Segment Operating Margin |
$ |
251,469 |
|
$ |
87,861 |
|
$ |
339,330 |
|
$ |
(43,581 |
) |
|
$ |
295,749 |
|
Less: |
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
67,601 |
||||||
Transaction and integration costs |
|
|
|
|
|
|
|
|
|
5,620 |
||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
35,793 |
||||||
Interest expense |
|
|
|
|
|
|
|
|
|
63,588 |
||||||
Other (income) expense, net |
|
|
|
|
|
|
|
|
|
10,214 |
||||||
Loss from extinguishment of debt |
|
|
|
|
|
|
|
|
|
14,997 |
||||||
(Income) from equity method investments |
|
|
|
|
|
|
|
|
|
31,734 |
||||||
Tax provision |
|
|
|
|
|
|
|
|
|
9,971 |
||||||
Net Income |
|
|
|
|
|
|
|
|
$ |
56,231 |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||
(1) |
Terminals and Infrastructure includes the Company's effective share of revenues, expenses and operating margin attributable to |
|
(2) |
Ships includes the Company's effective share of revenues, expenses and operating margin attributable to |
|
(3) |
Consolidation and Other adjusts for the inclusion of the effective share of revenues, expenses and operating margin attributable to |
Adjusted Net Income and Adjusted Earnings per Share
(Unaudited, in thousands of
The following table sets forth a reconciliation between net income attributable to stockholders and earnings per share adjusted for non-cash impairment charges and losses on disposals of assets.
|
|
Three months ended March 31, 2023 |
|
Three months ended June 30, 2023 |
|
Three months ended September 30, 2023 |
Nine months ended September 30, 2023 |
|||||
Net income attributable to stockholders |
|
$ |
150,206 |
|
$ |
119,248 |
|
$ |
61,221 |
$ |
330,675 |
|
Non-cash impairment charges, net of tax |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
Loss on disposal of investment in Hilli LLC |
|
|
37,401 |
|
|
— |
|
|
— |
|
37,401 |
|
Adjusted net income |
|
$ |
187,607 |
|
$ |
119,248 |
|
$ |
61,221 |
$ |
368,076 |
|
|
|
|
|
|
|
|
|
|||||
Weighted-average shares outstanding - diluted |
|
|
209,325,619 |
|
|
205,711,467 |
|
|
205,032,928 |
|
206,804,833 |
|
|
|
|
|
|
|
|
|
|||||
Adjusted earnings per share |
|
$ |
0.90 |
|
$ |
0.58 |
|
$ |
0.30 |
$ |
1.78 |
|
Condensed Consolidated Balance Sheets As of September 30, 2023 and December 31, 2022
(Unaudited, in thousands of |
||||||
|
September 30, 2023 |
|
December 31, 2022 |
|||
Assets |
|
|
|
|||
Current assets |
|
|
|
|||
Cash and cash equivalents |
$ |
171,329 |
|
$ |
675,492 |
|
Restricted cash |
|
66,162 |
|
|
165,396 |
|
Receivables, net of allowances of |
|
360,820 |
|
|
280,313 |
|
Inventory |
|
103,331 |
|
|
39,070 |
|
Prepaid expenses and other current assets, net |
|
164,559 |
|
|
226,883 |
|
Total current assets |
|
866,201 |
|
|
1,387,154 |
|
|
|
|
|
|||
Construction in progress |
|
4,789,799 |
|
|
2,418,608 |
|
Property, plant and equipment, net |
|
2,563,871 |
|
|
2,116,727 |
|
Equity method investments |
|
139,058 |
|
|
392,306 |
|
Right-of-use assets |
|
474,483 |
|
|
377,877 |
|
Intangible assets, net |
|
67,443 |
|
|
85,897 |
|
Goodwill |
|
776,760 |
|
|
776,760 |
|
Deferred tax assets, net |
|
8,074 |
|
|
8,074 |
|
Other non-current assets, net |
|
110,681 |
|
|
141,679 |
|
Total assets |
$ |
9,796,370 |
|
$ |
7,705,082 |
|
|
|
|
|
|||
Liabilities |
|
|
|
|||
Current liabilities |
|
|
|
|||
Current portion of long-term debt and short-term borrowings |
$ |
270,547 |
|
$ |
64,820 |
|
Accounts payable |
|
892,924 |
|
|
80,387 |
|
Accrued liabilities |
|
435,692 |
|
|
1,162,412 |
|
Current lease liabilities |
|
142,296 |
|
|
48,741 |
|
Other current liabilities |
|
169,744 |
|
|
52,878 |
|
Total current liabilities |
|
1,911,203 |
|
|
1,409,238 |
|
|
|
|
|
|||
Long-term debt |
|
5,897,528 |
|
|
4,476,865 |
|
Non-current lease liabilities |
|
318,082 |
|
|
302,121 |
|
Deferred tax liabilities, net |
|
27,206 |
|
|
25,989 |
|
Other long-term liabilities |
|
63,789 |
|
|
49,010 |
|
Total liabilities |
|
8,217,808 |
|
|
6,263,223 |
|
|
|
|
|
|||
Commitments and contingencies |
|
|
|
|||
|
|
|
|
|||
Stockholders’ equity |
|
|
|
|||
Class A common stock, |
|
2,050 |
|
|
2,088 |
|
Additional paid-in capital |
|
1,039,428 |
|
|
1,170,254 |
|
Retained earnings |
|
331,282 |
|
|
62,080 |
|
Accumulated other comprehensive income |
|
63,312 |
|
|
55,398 |
|
Total stockholders’ equity attributable to NFE |
|
1,436,072 |
|
|
1,289,820 |
|
Non-controlling interest |
|
142,490 |
|
|
152,039 |
|
Total stockholders’ equity |
|
1,578,562 |
|
|
1,441,859 |
|
Total liabilities and stockholders’ equity |
$ |
9,796,370 |
|
$ |
7,705,082 |
|
Condensed Consolidated Statements of Operations For the three and nine months ended September 30, 2023 and 2022
(Unaudited, in thousands of |
||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
Revenues |
|
|
|
|
|
|
|
|||||||||
Operating revenue |
$ |
420,868 |
|
|
$ |
632,684 |
|
|
$ |
1,417,175 |
|
|
$ |
1,529,999 |
|
|
Vessel charter revenue |
|
67,287 |
|
|
|
92,860 |
|
|
|
209,651 |
|
|
|
260,414 |
|
|
Other revenue |
|
26,307 |
|
|
|
6,386 |
|
|
|
28,112 |
|
|
|
31,490 |
|
|
Total revenues |
|
514,462 |
|
|
|
731,930 |
|
|
|
1,654,938 |
|
|
|
1,821,903 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating expenses |
|
|
|
|
|
|
|
|||||||||
Cost of sales (exclusive of depreciation and amortization shown separately below) |
|
191,920 |
|
|
|
393,830 |
|
|
|
602,626 |
|
|
|
874,529 |
|
|
Vessel operating expenses |
|
11,613 |
|
|
|
20,318 |
|
|
|
36,347 |
|
|
|
61,910 |
|
|
Operations and maintenance |
|
60,819 |
|
|
|
22,033 |
|
|
|
121,187 |
|
|
|
65,691 |
|
|
Selling, general and administrative |
|
49,107 |
|
|
|
67,601 |
|
|
|
157,048 |
|
|
|
165,952 |
|
|
Transaction and integration costs |
|
2,739 |
|
|
|
5,620 |
|
|
|
4,787 |
|
|
|
12,387 |
|
|
Depreciation and amortization |
|
48,670 |
|
|
|
35,793 |
|
|
|
125,160 |
|
|
|
106,439 |
|
|
Asset impairment expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
48,109 |
|
|
Total operating expenses |
|
364,868 |
|
|
|
545,195 |
|
|
|
1,047,155 |
|
|
|
1,335,017 |
|
|
Operating income |
|
149,594 |
|
|
|
186,735 |
|
|
|
607,783 |
|
|
|
486,886 |
|
|
Interest expense |
|
64,822 |
|
|
|
63,588 |
|
|
|
200,891 |
|
|
|
156,344 |
|
|
Other (income) expense, net |
|
(2,271 |
) |
|
|
10,214 |
|
|
|
16,150 |
|
|
|
(31,613 |
) |
|
Loss on extinguishment of debt |
|
— |
|
|
|
14,997 |
|
|
|
— |
|
|
|
14,997 |
|
|
Income before income from equity method investments and income taxes |
|
87,043 |
|
|
|
97,936 |
|
|
|
390,742 |
|
|
|
347,158 |
|
|
Income (loss) from equity method investments |
|
489 |
|
|
|
(31,734 |
) |
|
|
12,738 |
|
|
|
(354,426 |
) |
|
Tax provision (benefit) |
|
25,194 |
|
|
|
9,971 |
|
|
|
69,476 |
|
|
|
(126,249 |
) |
|
Net income |
|
62,338 |
|
|
|
56,231 |
|
|
|
334,004 |
|
|
|
118,981 |
|
|
Net (income) loss attributable to non-controlling interest |
|
(1,117 |
) |
|
|
5,617 |
|
|
|
(3,329 |
) |
|
|
11,371 |
|
|
Net income attributable to stockholders |
$ |
61,221 |
|
|
$ |
61,848 |
|
|
$ |
330,675 |
|
|
$ |
130,352 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income per share – basic |
$ |
0.30 |
|
|
$ |
0.30 |
|
|
$ |
1.60 |
|
|
$ |
0.62 |
|
|
Net income per share – diluted |
$ |
0.30 |
|
|
$ |
0.29 |
|
|
$ |
1.59 |
|
|
$ |
0.62 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Weighted average number of shares outstanding – basic |
|
205,032,928 |
|
|
|
209,629,936 |
|
|
|
206,249,474 |
|
|
|
209,749,139 |
|
|
Weighted average number of shares outstanding – diluted |
|
205,032,928 |
|
|
|
209,800,427 |
|
|
|
206,804,833 |
|
|
|
209,869,058 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Condensed Consolidated Statements of Cash Flows For the nine months ended September 30, 2023 and 2022
(Unaudited, in thousands of |
||||||||
|
Nine Months Ended September 30, |
|||||||
|
2023 |
|
2022 |
|||||
Cash flows from operating activities |
|
|
|
|||||
Net income |
$ |
334,004 |
|
|
$ |
118,981 |
|
|
Adjustments for: |
|
|
|
|||||
Depreciation and amortization |
|
125,853 |
|
|
|
107,185 |
|
|
(Earnings) losses of equity method investees |
|
(12,738 |
) |
|
|
354,426 |
|
|
Dividends received from equity method investees |
|
5,830 |
|
|
|
23,195 |
|
|
Change in market value of derivatives |
|
(2,672 |
) |
|
|
(6,700 |
) |
|
Deferred taxes |
|
1,217 |
|
|
|
(203,026 |
) |
|
Asset impairment expense |
|
— |
|
|
|
48,109 |
|
|
Earnings recognized from vessels chartered to third parties transferred to Energos |
|
(112,608 |
) |
|
|
(14,341 |
) |
|
Loss on the disposal of equity method investment |
|
37,401 |
|
|
|
— |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
14,997 |
|
|
Loss on sale of net investment in lease |
|
— |
|
|
|
11,592 |
|
|
Other |
|
2,211 |
|
|
|
15,464 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|||||
(Increase) in receivables |
|
(86,743 |
) |
|
|
(287,748 |
) |
|
(Increase) in inventories |
|
(29,238 |
) |
|
|
(28,078 |
) |
|
Decrease (Increase) in other assets |
|
56,512 |
|
|
|
(93,329 |
) |
|
Decrease in right-of-use assets |
|
68,360 |
|
|
|
51,265 |
|
|
Increase (decrease) in accounts payable/accrued liabilities |
|
73,211 |
|
|
|
(10,487 |
) |
|
Increase (decrease) in amounts due to affiliates |
|
1,613 |
|
|
|
(3,220 |
) |
|
(Decrease) in lease liabilities |
|
(56,908 |
) |
|
|
(47,237 |
) |
|
Increase in other liabilities |
|
131,879 |
|
|
|
40,057 |
|
|
Net cash provided by operating activities |
|
537,184 |
|
|
|
91,105 |
|
|
|
|
|
|
|||||
Cash flows from investing activities |
|
|
|
|||||
Capital expenditures |
|
(2,191,605 |
) |
|
|
(787,166 |
) |
|
Sale of equity method investment |
|
100,000 |
|
|
|
— |
|
|
Proceeds from sale of net investment in lease |
|
— |
|
|
|
593,000 |
|
|
Other investing activities |
|
26,043 |
|
|
|
(1,794 |
) |
|
Net cash used in investing activities |
|
(2,065,562 |
) |
|
|
(195,960 |
) |
|
|
|
|
|
|||||
Cash flows from financing activities |
|
|
|
|||||
Proceeds from borrowings of debt |
|
1,768,715 |
|
|
|
1,932,020 |
|
|
Payment of deferred financing costs |
|
(18,064 |
) |
|
|
(16,093 |
) |
|
Repayment of debt |
|
(104,530 |
) |
|
|
(1,518,471 |
) |
|
Payments related to tax withholdings for share-based compensation |
|
(9,519 |
) |
|
|
(72,597 |
) |
|
Payment of dividends |
|
(700,440 |
) |
|
|
(75,149 |
) |
|
Other financing activities |
|
(12,090 |
) |
|
|
— |
|
|
Net cash provided by financing activities |
|
924,072 |
|
|
|
249,710 |
|
|
Impact of changes in foreign exchange rates on cash and cash equivalents |
|
923 |
|
|
|
(4,896 |
) |
|
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
(603,383 |
) |
|
|
139,959 |
|
|
Cash, cash equivalents and restricted cash – beginning of period |
|
855,083 |
|
|
|
264,030 |
|
|
Cash, cash equivalents and restricted cash – end of period1 |
$ |
251,700 |
|
|
$ |
403,989 |
|
|
| ______________________________ |
1 Cash and cash equivalents includes |
View source version on businesswire.com: https://www.businesswire.com/news/home/20231108871619/en/
Investor Relations:
Chance Pipitone
ir@newfortressenergy.com
Media Relations:
Ben Porritt
press@newfortressenergy.com
(516) 268-7403
Source: New Fortress Energy Inc.
FAQ
What are the financial results reported by New Fortress Energy Inc. (Nasdaq: NFE) for Q3 2023?
What achievements were highlighted in the press release?
What does New Fortress Energy Inc. expect in terms of earnings and capex for Q4 2023?
How much non-core asset sales did the company identify for deleveraging?
