Hot Energy stock to watch: New Fortress Energy LLC (NASDAQ: NFE)

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New Fortress Energy LLC (NASDAQ: NFE) stock rose over 4.7% on 13th August, 2019 (As of 12:09 pm GMT-4; Source: Google finance) after the company in the second quarter of FY 19 has reported the adjusted earnings per share of 28 cents, beating the analysts’ estimates for the adjusted earnings per share of 10 cents.

NFE’s Revenue for the second quarter of FY 19 increased compared to the second quarter of 2018 due to revenue generated from the Old Harbour terminal, added volumes sold through our Montego Bay facility to the Bogue power plant, and new commercial and industrial customer contracts coming online. Cost of goods sold was higher due to LNG costs associated with a spot market cargo purchase that was fully consumed during Q1 and Q2 2019. Due to these higher LNG costs, the weighted average cost of gas increased from $0.69 per gallon in Q2 2018 to $0.83 per gallon in second quarter of FY 19. Operation and maintenance cost were higher during the second quarter of FY 19 due to additional costs associated with operating our charter vessels. SG&A for second quarter of FY 19 was higher than Q2 2018 largely due to increased costs associated with headcount, professional fees, as well as non-cash compensation expense.

Moreover, the company has taken fully underwritten commitment for $180mm in financing to complete the construction of the Jamalco CHP Plant. Cash on hand, including restricted cash, as of June 30, 2019 was $258mm which, combined with expected cash flows from operations and expected new financing to complete the Jamalco CHP Plant, is expected to fully fund all downstream Committed project costs.

Additionally, the micro fuel handling facility in San Juan, Puerto Rico is expected to commence commercial operations in Q4 2019. Total Committed volumes are of 2.6mm gallons per day as of Q2 2019, an increase from 1.0mm GPD in Q2 2018. NFE had 14 projects under development with total remaining project cost of ~$282mm, as of Q2 2019.

Meanwhile, NFE has signed a memorandum of understanding (MOU) with the Angolan Ministry of Mineral Resources and Petroleum, Ministry of Energy and Water and Ministry of Finance for the development of a liquefied natural gas (LNG) terminal to supply natural gas to Angola for power generation. Under the MOU, New Fortress would fund, build, and operate an LNG import and regasification terminal and supply gas to power and industrial facilities across Angola and work with the Ministry of Mineral Resources and Petroleum to explore the development of additional indigenous natural gas resources and a domestic liquefaction facility.

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