Tuesday 14 July, 2020

Jamalco and Old Harbour projects boost New Fortress' earnings

New Fortress Energy in its third-quarter earnings reported this month that increased revenues for the period ended September 2019 were due to sales from the Old Harbour terminal and new commercial and industrial customer contracts coming stream.

The revenue increase was also due to construction revenue recognised for Jamalco and Puerto Rico projects.

New Fortress is a global energy infrastructure that builds and operates natural gas facilities and logistics. It is majority-owned by a fund managed by an affiliate of Fortress Investment Group.

Its quarterly earnings data show the company reporting $0.30 earnings per share (EPS) for the review quarter, on revenue of $49.66 million.

The company, however, had a negative return on equity of 14.58 per cent and a negative net margin of 40.60 per cent.

New Fortress indicated it is in currently in discussions with more than 100 commercial and industrial customers in Puerto Rico, Jamaica and Mexico to do business.

It outlined that to date, total committed volumes and in-discussion volumes as of September 30, 2019, increased approximately 250 per cent as compared to September 30, 2018.

New Fortress outlined that the Old Harbour Terminal in Jamaica is now fully operational and the commissioning of JPS’ Old Harbour Power Plant is ongoing. Consumption at the Old Harbour plant is expected to exceed prior estimates, based on current nominations.

Jamalco CHP plant substation construction has been completed and achieved “first fire” in Q4 2019.

Concerning financing, the company outlined that it has closed on a $180 million bond commitment, secured by the Jamalco CHP Plant. It has also issued $117 million in bonds to complete the construction of the power plant.

New Fortress is slated to issue an additional $63 million in bonds during the fourth quarter ending December 2019.

Cash as of September 30, 2019, stood at $244 million. This amount combined with expected cash flows from operations and undrawn amount from the bonds secured by the Jamalco CHP Plant is expected to fully fund all downstream committed projects.

New Fortress indicated that as construction projects become operational, it expects to refinance.

The company also noted that leverage on cash flows from operational terminals is expected to fund future developments.

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