NEW YORK - New Fortress Energy Inc. (NASDAQ: NASDAQ:NFE), a global energy infrastructure company, has announced the sale of two power plants to the Puerto Rico Electric Power Authority (PREPA) and the awarding of a significant gas supply contract.
The company sold its emergency power plants in San Juan and Palo Seco for $373 million, a move that transfers the ownership of these critical energy assets to PREPA. These facilities were developed in response to a U.S. Army Corps of Engineers bid to stabilize Puerto Rico's power grid following recent natural disasters.
In addition to the sale, NFE has secured an 80 TBtu gas supply contract with PREPA, more than doubling the gas volumes it currently provides. This contract, which lasts up to four years, supports the conversion of additional power plants on the island from diesel to gas, aiming to supply cleaner and more affordable energy.
Wes Edens, Chairman and CEO of New Fortress Energy, stated that the transactions underscore the company's dedication to enhancing Puerto Rico's energy security and reducing costs. The deals also represent a significant expansion of NFE's business in the region.
The completion of these transactions is expected to lead to the negotiation of a settlement regarding the early termination of contracts related to the construction and operation of the sold plants.
New Fortress Energy entered the Puerto Rican market in 2017, focusing on addressing the island's urgent need for natural gas and power. The company's broader mission is to combat energy poverty and facilitate a global shift to reliable, affordable, and clean energy.
This article is based on a press release statement from New Fortress Energy Inc.
InvestingPro Insights
As New Fortress Energy Inc. (NASDAQ: NFE) continues to expand its operations in Puerto Rico with the recent sale of two power plants and the securing of a substantial gas supply contract, the company's financial health and market performance become key areas of interest for investors.
InvestingPro data shows that NFE has a market capitalization of $6.43 billion, reflecting the company's size and market value relative to its peers. The P/E ratio, a measure of the company's current share price relative to its per-share earnings, stands at 11.84, indicating how much investors are willing to pay for each dollar of earnings. This is slightly reduced to 11.29 when adjusted for the last twelve months as of Q4 2023. Additionally, the company has experienced a revenue growth of 38.8% in Q4 2023, demonstrating a significant increase in sales over the quarter.
While these metrics paint a picture of a company with a solid market presence and recent growth, InvestingPro Tips highlight some challenges that New Fortress Energy faces. The company operates with a significant debt burden and is quickly burning through cash. Moreover, short-term obligations exceed liquid assets, which may pose liquidity risks. It is important for investors to consider these factors alongside the company's expansion efforts and contract wins.
To gain a deeper understanding of NFE's financial health and to access additional insights, investors can explore more InvestingPro Tips. Currently, there are 9 more tips available on InvestingPro that could further inform investment decisions. For those interested in a comprehensive analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
The recent developments for New Fortress Energy in Puerto Rico are indeed significant, but a balanced view that includes both opportunities and potential risks can better inform investors' strategies.
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