New Fortress Energy reported a loss of $234 million for 2024 and plans to sell Jamaican and other foreign assets to reduce its $9 billion debt. CEO Wes Edens noted that these sales could raise $2 billion, contributing to financial improvement. The Jamaican operations generate significant profits, emphasizing their value and importance to the company.
New Fortress Energy (NFE), a regional natural gas supplier, experienced a significant loss of 234 million USD for the year ending December 2024. In order to mitigate its substantial debt of 9 billion USD, the company plans to sell assets in Jamaica, Brazil, and its shipping charters. During an investor call, Chairman and CEO Wes Edens emphasized that the initial focus is on their Jamaican operations.
Edens disclosed that the anticipated asset sales across selected countries are projected to generate approximately 2 billion USD. This move is aimed at improving the company’s financial position, as its debt was reported to be four times higher than its capital of 2 billion USD as of December. NFE has previously indicated intentions to sell its Jamaican assets and has provided updates following a divestment in Miami, Florida, last November.
The operations in Jamaica yield an annual operational profit of 125 million USD, equating to roughly 20 billion Jamaican dollars. Edens highlighted the strategic importance of these assets during the earnings call, noting that Jamaica represents their most established and developed market. He provided insight into the size of the Jamaican market, estimating it at about 30 trillion British thermal units (TBtu).
He stated, “Virtually all of that is cash flow because that’s what happens to these businesses over time. Once they’re up and running, there’s very little capital expenditure to operate them. It’s an extremely attractive profile of assets.” NFE commenced supplying liquefied natural gas to Jamaica approximately nine years ago and has since expanded into power generation, operating three core facilities throughout the country.
These facilities include the Montego Bay site, operational since 2016, which processes up to 60,000 MMBtu of LNG daily, and the Old Harbour facility, established in June 2019, capable of processing 750,000 MMBtu daily. The Montego Bay facility supplies gas under a long-term contract to Jamaica Public Service Company’s Bogue power plant, while the Old Harbour site fuels both JPS’ Old Harbour Power Plant and a 100MW combined heat and power (CHP) plant.
Edens confidently stated that local assets have never encountered any credit loss, underlining their robustness and desirability in the market. He remarked, “It’s in a very, very good market, and we have phenomenal people that we’re lucky to work with down there. Not surprisingly, it’s been a very sought-after asset.”
Despite New Fortress’ recent profitability, early debt repayments during the recent quarter resulted in a non-cash loss on extinguishment of debt. By the end of the year, the company reported an increase in cash reserves, closing with 966 million USD compared to 311 million USD the preceding year.
New Fortress Energy is strategically restructuring its operations by divesting specific assets to alleviate its hefty debt burden. With substantial profits generated from its Jamaican ventures, the company aims to reduce its debt and improve its financial health. As it focuses on these sales, particularly in Jamaica, New Fortress demonstrates a commitment to ensuring operational viability and growth moving forward.
Original Source: jamaica-gleaner.com
