New Fortress Energy Stock Plunges on Widening Q2 Loss, Asset Impairments
Shares fell 11% after the company posted a $557 million net loss and announced a review of its strategic options to improve its capital structure.
New Fortress Energy Inc. (NASDAQ: NFE) saw its shares tumble over 11% in after-hours trading after the global energy infrastructure company reported a significantly wider-than-expected second-quarter loss. The company posted a net loss of $557 million, or $2.02 per share, driven by a sharp revenue decline and substantial non-cash impairments.
The bleak results stand in stark contrast to the same period last year. The second-quarter loss of $556.8 million is a massive increase from the . Total revenue for the quarter fell 29.5% to $301.7 million from $428 million, largely impacted by the sale of its Jamaican assets to Excelerate Energy in May, a move intended to reduce debt.
A critical factor in the quarter's performance was a significant non-cash impairment charge totaling $699 million, as detailed in the company's . This was partially offset by a $473 million gain from the Jamaican asset sale. The company's adjusted core earnings swung to a loss of $3.7 million from a $120.2 million profit in the year-ago quarter.
In response to its weakening financial position, New Fortress Energy has to improve its capital structure. The company has retained Houlihan Lokey Capital, Inc. as a financial advisor to explore options that could include further asset sales, capital raising, or debt refinancing. Despite the asset sale, the company's long-term debt stood at $7.8 billion as of June 30.
While management pointed to potential bright spots, including progress on its PortoCem power plant in Brazil and the commissioning of its CELBA plant in Puerto Rico, the substantial loss and strategic review have unsettled investors, signaling potential volatility ahead for the energy firm.