New Fortress Energy Announces Third Quarter 2021 Results

Source: 11/2/2021, Location: North America

New Fortress Energy Inc reported its financial results for the third quarter ending September 30, 2021.

Third Quarter Highlights
• Record Total Segment Operating Margin(1) in Q3 of approximately $210 million, beating Illustrative Total Segment Operating Margin Goal(2) of $208 million
• Illustrative Total Segment Operating Margin Goal for the 2nd half of 2021 expected to be $585 million, a 50% increase from the Illustrative Total Segment Operating Margin Goal set in July
• FY 2022 Illustrative Total Segment Operating Margin Goal is on track for over $1.1 billion with significant earnings growth as Brazil, Ireland and Fast LNG come Online(3)

• Continued energy shortages in Brazil have led to emergency power measures, including an auction in the South and Southeast region which took place in October:
o 1.2 GW of new power projects were awarded in the October auction with an average variable power price of $0.14 / kWh
o NFE positioned to supply LNG through the Santa Catarina terminal to over 400MW (>900k GPD of LNG forecasted) of new power plants
o Supply period will be Q2 2022 through end of 2025
• NFE and Norsk Hydro executed definitive commercial terms for a 15-year LNG supply agreement utilizing NFE’s Barcarena LNG terminal
o ~1.0m GPD to supply the Alunorte alumina refinery (co-located with the Barcarena terminal) starting Q1 2023

Development update
• NFE continues to make great progress on our first Fast LNG assets, which we intend to deploy through two distinct business lines:
o Tolling agreements with high credit quality counterparties to lock in stable cash flows similar to our current FLNG asset, the Hilli
o Merchant production where we maximize flexibility by supplying through our owned infrastructure or into the spot market at more profitable rates
• In Nicaragua, we are completing terminal and power plant construction in Q4 2021, and we expect to begin commissioning of our power plant in Q1 2022
• Our La Paz terminal in Baja California Sur, Mexico is fully Operational(3)
o CFEnegia power plant fully commissioned on natural gas
o NFE power plant will begin commissioning in Q4 2021
• Our development projects in Barcarena and Santa Catarina are advancing on schedule
o Signed EPC contracts, obtained all material permits and commenced construction

Energy transition
• Nearing FID(4) on first blue ammonia facility which will include the capture of up to 99% of CO2 emitted
o Targeting an acquisition of a key site on the U.S. Gulf Coast in the fourth quarter, with permitting, EPC contract and financing completed in Q1 2022
o First facility targeted to be operational within 20 to 24 months from FID
• Expect our Clean Fuels business to benefit from proposed Build Back Better legislation

Financing update
• We closed a ship financing facility at pricing of LIBOR + 300bps with initial proceeds of $425mm; ability to increase this facility by approximately $300mm
• Our Board of Directors approved a dividend of $0.10 per share, with a record date of December 7, 2021 and a payment date of December 17, 2021

Financial Highlights
Total Segment Operating Margin of $210.5mm, including contribution of approximately $116mm from our Terminals and Infrastructure segment and approximately $95mm from our Ships segment. Total Segment Operating Margin increase driven by incremental revenue from our Ships segment and the Sergipe Power Plant.

• Record quarterly revenue of over $300mm, increasing approximately $81mm from the second quarter
• Record Total Segment Operating Margin in Q3 of $210.5 million, resulting from:
o Terminals and Infrastructure Segment Operating Margin increased from cargo sales, emergency dispatch at the Sergipe Power Plant and the impact of increased natural gas pricing
o Ships Segment Operating Margin includes a full quarter of contribution from FSRUs and LNG carriers that are leased to customers under long-term or spot arrangements as well as a full quarter of our effective share of the revenue and costs of the Hilli

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