New Fortress Energy reported a US$234 million loss for 2024 and plans to sell assets in Jamaica, Brazil, and shipping charters to reduce its US$9 billion debt. CEO Wes Edens highlighted Jamaica’s operations, generating US$125 million annually, as key to financial recovery. The company aims to raise US$2 billion through these targeted sales.
Regional natural gas supplier New Fortress Energy (NFE) announced a loss of US$234 million for the year ending December 2024 and plans to sell certain assets in Jamaica, Brazil, and its shipping charters to alleviate its debt burden. Chairman and CEO Wes Edens indicated that the foremost asset considered for sale is located in Jamaica, aiming to raise approximately US$2 billion, reducing NFE’s current US$9 billion debt which is significantly higher than its US$2 billion in capital.
Companies commonly target debt levels below their capital for sustainable payment management. NFE had initially unveiled its intentions to divest Jamaican assets last year, recently updating stakeholders on the sales process following the dispose of an asset in Miami last November. The Jamaican operations reportedly yield an annual operational profit of US$125 million, equating to roughly 20 billion Jamaican dollars, enhancing the company’s financial position.
Edens emphasized the prominent role of Jamaican assets, stating, “Jamaica is the country where we went first. It’s our oldest and most developed market. Just by review, it’s about a 30 TBtu downstream market. We generate about US$125 million in EBITDA,” during an investor call. He remarked that after stabilization, these operations require minimal capital expenditure, rendering them attractive investments as they generate substantial cash flow.
Having commenced liquefied natural gas supply to Jamaica nearly nine years ago, New Fortress has expanded its involvement in power generation, managing three primary facilities in Montego Bay, Old Harbour, and Hayes. The Montego Bay facility, operational since 2016, can process up to 60,000 MMBtu of LNG daily, providing stable supply to Jamaica Public Service Company’s Bogue power plant through a long-term contract.
The Old Harbour facility, which began operations in 2019, processes 750,000 MMBtu of LNG daily and serves the JPS Old Harbour Power Plant. It also fuels a 100MW combined heat and power (CHP) plant with long-term contracts established for steam supply. Edens underscored the historical reliability of local assets, noting they have “never suffered a dollar of credit loss” throughout their operational history, reflecting their consistent financial viability.
Despite recent profitability, New Fortress faced a non-cash loss due to early debt repayments in the fourth quarter. The company’s cash reserve at the close of the year rose to US$966 million from US$311 million the preceding year.
New Fortress Energy is strategically selling assets, particularly in Jamaica, to reduce its significant debt load amounting to US$9 billion. The Jamaica operations have proven to be valuable, delivering substantial annual profit and maintaining a strong market presence without historical credit losses. The company’s financial health is bolstered by a rise in cash reserves, despite recent losses due to debt extinguishment. Overall, NFE is focusing on offloading specific assets to improve its fiscal stability and operational performance.
Original Source: jamaica-gleaner.com
