New Fortress Energy (NFE) is laying the groundwork for future profitability. That according to the company’s CEO, Wes Edens, sharing with investors this week in spite of a second quarter of nearly US$167 million loss for the period ending June 30.
Edens highlighted strong return on sales, with the company reporting an operating profit of US$15.2 million, up from a US$2.2 million operating loss in Q1.
Volumes of liquefied natural gas (LNG) sold surged upwards, with the average daily volume rising to 978,000 gallons per day, an increase of nearly 30 per cent.
Revenue was US$95 million, up from US$74.5 million, with increased volumes driven by a full quarter of operations at the Jamalco CHP facility and revenue on gas supplied from the San Juan facility.
Eden said plants in Jamaica and Puerto Rico look to increase operating income by US$400 million/year. NFE expects an additional US$150 million in annual operating income, taking into account the Mexico and Nicaragua projects set to start by end-2020.
Despite COVID, Edens said that the pipeline for future business was robust, attributing the quarterly net loss mainly to the one-time US$105 million premium NFE paid for the cancellation of eight LNG cargoes.
Edens outlined that, out of the transaction, NFR would gain on spot purchases anywhere below US$2.94/MMBTU (million British thermal units) – the price negotiated with the cancelled cargoes. The company has subsequently purchased two of the eight LNG cargoes that needed to be replaced, the first at US$1.92/MMBTU and the second at US$1.85/MMBTU.
Edens also disclosed that the company’s overall debt stands at “about US$1 billion,” where the overall cost of debt is around 8.3-8.4 per cent.
The company said the company’s four major operating assets in the Caribbean – Montego Bay, Old Harbour, the Jamalco CHP in Jamaica, and San Juan have now hit their run-rate volumes, totaling in excess of 1.7Mg/d.