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New Fortress Energy(NFE) - 2024 Q2 - Quarterly Report
NFENew Fortress Energy(NFE)2024-08-09 20:50
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Company Operations and Infrastructure - The company operates natural gas and LNG infrastructure, with a mission to provide cleaner, reliable energy while generating a positive economic impact worldwide [146]. - The Montego Bay Facility processes up to 60,000 MMBtu of LNG per day, while the Old Harbour Facility can process up to 750,000 MMBtu of LNG per day [151][152]. - The Miami Facility, with a liquefaction capacity of approximately 8,300 MMBtu of LNG per day, is set to be sold for 62million,expectedtocloseinQ32024[158].−ThecompanyhasbindingcontractsforLNGvolumesfromtwoU.S.LNGfacilities,eachwitha20−yearterm,expectedtocommencein2027[159].−ThefirstFastLNGfacilitybeganproductioninJuly2024,withplanstoexpandcapacityasadditionalunitscomeonline[159][166].−Thecompanyisdevelopingmultiplemodularliquefactionfacilitiestoprovidelow−costLNGsupply,utilizingadvancementsinmodulartechnology[166].−TheBarcarenaFacilityisexpectedtoprocessover1millionMMBtufromLNGperdayandcommenceoperationsinthesecondhalfof2024,includinga15−yeargassupplyagreementwithNorskHydroASA[173].−TheSantaCatarinaFacility,withaprocessingcapacityofapproximately500,000MMBtufromLNGperday,isexpectedtocommenceoperationsinthesecondhalfof2024[176].−ThecompanyplanstoinstalluptotwoFLNGunitsoffthecoastofLouisiana,capableofexportingapproximately145billioncubicfeetofnaturalgasperyear,equivalentto2.8MTPAofLNG[170].−TheLaPazPowerPlant,withamaximumcapacityof135MW,wasplacedintoserviceinQ32023[157].FinancialPerformance−ConsolidatedSegmentOperatingMarginforQ22024was62 million, expected to close in Q3 2024 [158]. - The company has binding contracts for LNG volumes from two U.S. LNG facilities, each with a 20-year term, expected to commence in 2027 [159]. - The first Fast LNG facility began production in July 2024, with plans to expand capacity as additional units come online [159][166]. - The company is developing multiple modular liquefaction facilities to provide low-cost LNG supply, utilizing advancements in modular technology [166]. - The Barcarena Facility is expected to process over 1 million MMBtu from LNG per day and commence operations in the second half of 2024, including a 15-year gas supply agreement with Norsk Hydro ASA [173]. - The Santa Catarina Facility, with a processing capacity of approximately 500,000 MMBtu from LNG per day, is expected to commence operations in the second half of 2024 [176]. - The company plans to install up to two FLNG units off the coast of Louisiana, capable of exporting approximately 145 billion cubic feet of natural gas per year, equivalent to 2.8 MTPA of LNG [170]. - The La Paz Power Plant, with a maximum capacity of 135MW, was placed into service in Q3 2023 [157]. Financial Performance - Consolidated Segment Operating Margin for Q2 2024 was 158,351,000, with a gross margin of 120,938,000[186].−TotalrevenuefortheTerminalsandInfrastructureSegmentdecreasedby120,938,000 [186]. - Total revenue for the Terminals and Infrastructure Segment decreased by 262.3 million for the three months ended June 30, 2024, compared to the three months ended March 31, 2024, primarily due to contract terminations and maintenance issues in Puerto Rico operations [198]. - Total revenue increased by 35.1millionforthesixmonthsendedJune30,2024,comparedtothesameperiodin2023,drivenbyhighervolumesdelivered[199].−ForthesixmonthsendedJune30,2024,volumesdeliveredtodownstreamcustomerswere42.1TBtu,upfrom26.1TBtuinthesameperiodof2023[199].−Cashflowfromoperatingactivitiesdecreasedto35.1 million for the six months ended June 30, 2024, compared to the same period in 2023, driven by higher volumes delivered [199]. - For the six months ended June 30, 2024, volumes delivered to downstream customers were 42.1 TBtu, up from 26.1 TBtu in the same period of 2023 [199]. - Cash flow from operating activities decreased to 163.0 million for the six months ended June 30, 2024, down 340.9millionfrom340.9 million from 503.9 million for the same period in 2023 [246]. - The company recognized 90millionindeferredearningsfromcontractedsalesforthesixmonthsendedJune30,2024[197].−ConsolidatedSegmentOperatingMargin(Non−GAAP)forthesixmonthsendedJune30,2024,was90 million in deferred earnings from contracted sales for the six months ended June 30, 2024 [197]. - Consolidated Segment Operating Margin (Non-GAAP) for the six months ended June 30, 2024, was 542.6 million, down from 644.7millioninthesameperiodof2023[193].−TotalrevenuefortheShipssegmentdecreasedby644.7 million in the same period of 2023 [193]. - Total revenue for the Ships segment decreased by 78.6 million for the six months ended June 30, 2024, compared to the same period in 2023, largely due to the disposition of the investment in Hilli LLC [211]. Costs and Expenses - Cost of sales increased by 154.8millionforthesixmonthsendedJune30,2024,comparedtothesameperiodin2023,duetoincreasedLNGprocurementcosts[201].−Vesselcostsincreasedby154.8 million for the six months ended June 30, 2024, compared to the same period in 2023, due to increased LNG procurement costs [201]. - Vessel costs increased by 47.3 million for the six months ended June 30, 2024, compared to the same period in 2023, as additional vessels were chartered to support operations [203]. - Operations and maintenance costs increased by 47.5millionforthesixmonthsendedJune30,2024,comparedtothesameperiodin2023,primarilyduetothegridstabilizationprojectinPuertoRico[206].−Selling,generalandadministrativeexpensesincreasedby47.5 million for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to the grid stabilization project in Puerto Rico [206]. - Selling, general and administrative expenses increased by 33.4 million for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to increased share-based compensation expenses [218]. - Interest expense increased by 21.7millionforthesixmonthsendedJune30,2024,comparedtothesameperiodin2023,duetoanincreaseintotalprincipaloutstandingfromadditionalborrowings[222].InvestmentsandFinancing−ThecompanycompletedforwardsalesinQ22024,receivingaprepaymentof21.7 million for the six months ended June 30, 2024, compared to the same period in 2023, due to an increase in total principal outstanding from additional borrowings [222]. Investments and Financing - The company completed forward sales in Q2 2024, receiving a prepayment of 90.0 million, with revenue to be recognized in the third and fourth quarters of 2024 [207]. - The company has entered into a Backstop Agreement to potentially issue senior secured notes up to an aggregate principal amount of 875milliontofundtherepurchaseofoutstanding2025Notes[231].−Thecompanyborrowed875 million to fund the repurchase of outstanding 2025 Notes [231]. - The company borrowed 284.4 million under the BNDES Credit Agreement in Q1 2024, mainly to repay the Barcarena Term Loan and fund the Barcarena Power Plant development [255]. - The company entered into an EB-5 Loan Agreement for up to 100.0milliontodevelopanewgreenhydrogenfacilityinTexas,withaninterestrateof4.75100.0 million to develop a new green hydrogen facility in Texas, with an interest rate of 4.75% [257]. - The PortoCem Bridge Loan allows borrowing up to R2.9 billion (269.9million)dueinOctober2025,withnoprincipalpaymentsrequireduntilmaturity[260].−Thecompanyrepaid269.9 million) due in October 2025, with no principal payments required until maturity [260]. - The company repaid 188.4 million in Equipment Notes in full, incurring a prepayment premium of 3% [262]. Regulatory and Market Conditions - The company is challenging regulatory decisions regarding the development of an LNG terminal and power plant in Ireland, which could materially affect operations [177]. - Average Henry Hub index pricing decreased by 15% for the three months ended June 30, 2024, compared to the previous quarter [198]. - A 100-basis point change in market interest rates would affect the fair value of fixed-rate debt by approximately $79.6 million [268].