Record profit for New Fortress
Gas supplier next eyeing operating bonanza of US$1.3b
AMERICAN NATURAL gas supplier New Fortress Energy, NFE, racked up record profit of US$548 million year, bettering its previous annual outturn by 180 per cent.
“This year was a record by all of our reported metrics,” said Wes Edens, NFE president and CEO, in an investor call following the release of the company’s earnings report.
New Fortress supplies gas to Jamaica Public Service Company, JPS, and other commercial entities in Jamaica, where its operations began with JPS as its first client in 2016. Since then, the energy company has expanded geographically into markets such as Brazil and Puerto Rico.
It has also ventured into power generation.
Today, NFE, which began in 2014, owns or manages 30 plants with total capacity of 8.7 gigawatts, spread across five countries.
The company forecasts doubling its operating profit from US$735 million in 2023 to US$1.3 billion in 2024.
Edens said that NFE has transitioned to an“operating company” from a “developmental company” with growing cash flows.
“This is a major change in the company’s performance and a significant and meaningful improvement in both the quality and quantity of our results,” he said.
For 2023, New Fortress booked annual revenue of US$2.4 billion, compared to US$2.37 billion in 2022, and US$1.3 billion in 2021. Though largely stable, the flat top line hid the jump in cash from operations, which rose to US$825 million, up from US$355 million in 2022, and US$85 million in 2021.
“We couldn’t be better positioned as a company,” said Edens.
In terms of power generation, NFE owns 150 MW in Jamaica, 350 MW in Puerto Rico in addition to 4.25 GW of managed power, 135 MW in Mexico, 200 MW in Nicaragua, and 2.6 GW n Brazil.
In terms of gas flows supplied through its terminals, Jamaica generally utilises 10 per cent of gas capacity, Puerto Rico 25 per cent, Mexico 10 per cent, Nicaragua 20 per cent, and Brazil 40 per cent.
“The excess capacity of our terminals creates significant growth opportunity without significant terminal capex,” said Edens.
The company, which started operations in Jamaica in 2016, two years after its inception, was a key player in diversifying the island’s power plant energy mix from inefficient diesel oil to more efficient gas. The savings to customers is somewhat muted as gas prices have fluctuated heavily since the pandemic.
NFE views Brazil as an opportunity to augment that nation’s energy efficiency with gas. Brazil is three-quarters reliant on hydropower, which can fluctuate due to variant rain patterns. Natural gas, with its predictable generation, can balance power shortfalls when hydropower supplies falter, it reasons.
In Puerto Rico, NFE now manages the bulk of the island’s power, arising from winning a 10-year government tender in 2023 to operate, decommission, and modernise power assets.
“Perhaps none as attractive on a long-term basis as Brazil and Puerto Rico, but all of our terminals have the same competitive position,” said Edens about the company’s lack of competitors, in part due to heavy infrastructure investments and long-term contracts with incumbent power suppliers.
The group held US$10.5 billion in total assets as at December 2023, while its capital amounts to US$1.6 billion, up from $1.3 billion a year earlier.