NFE cuts losses as footprint grows - Jamalco power plant commissioned March 3
Published:Friday | March 6, 2020 | 12:17 AM
New Fortress Energy, the sole supplier of natural gas to Jamaica, made operating profit of US$1.3 million in the quarter ending December, hitting break-even on its operations for the first time.
The American company still made a net loss in the quarter, but for the full year, those losses shrank by more than a half.
Reflective of its bullish outlook on the future amid the improved numbers, CEO Wes Edens said in an investor call on Wednesday that the company was already “five-twentieth” along the way towards its medium-term goal of being a top energy supplier. Five represents the number of gas terminals and power assets in varying stages of operation or development– all based in the hemisphere; and 20 refers to the number of assets it wants to own in the medium to long term.
The company, which trades on the Nasdaq stock exchange, beat revenue estimates by Wall Street analysts, but missed estimates on its earnings. Analysts predicted a loss of US$0.21 per share, but the out-turn was worse than expected at US$0.30 per share. On an adjusted basis, however, the loss fell to US$0.08 per share which beat analysts projections, according to an update on Thursday by Yahoo Finance.
Revenue for the fourth quarter totalled US$69.8 million, and for the full year, US$189 million. NFE made a net loss of US$7.4 million in the quarter and US$33 million for the full year.
For 2018, the company booked revenue of US$112 million, against which it made a loss of US$78 million.
New Fortress’ operation focuses on building terminals that store liquefied natural gas, which it procures and on-sells to utility providers. However, the American company has just finalised and commissioned its first LNG-fired power plant at the Jamalco bauxite refinery complex in Clarendon, marking its entry into another side of the energy market as a producer of electricity.
The NFE power plant became operational on March 3. It will supply the Jamalco alumina refinery and sell the excess power supplies to Jamaica Public Service Company, the operator of the national electricity grid. The refinery is majority owned and operated by the Noble Group based in Hong Kong.
Elsewhere in the region, New Fortress is expanding to Puerto Rico and will deliver its ‘first gas’ to the electricity grid in that country shortly, having secured its floating regassification vessel in February.
NFE also received all necessary permits for the onshore construction of a 135MW power plant in La Paz, Mexico, while the fifth operation is in Nicaragua, where NFE announced in late February that it signed a 25-year agreement with a power provider to supply it with over 700,000 gallons of gas per day.
New Fortress’ assets were estimated at US$1.12 billion, up from US$699 million a year earlier. The growth came from the build out of assets in its primary market, Jamaica, and elsewhere in the region.