In a significant development for the energy sector, New Fortress Energy Inc. (NFE) has received tentative regulatory approval for a $3.2 billion deal to supply liquefied natural gas (LNG) to Puerto Rico.
This move comes at a critical time for the company, which is grappling with financial challenges, and could provide a much-needed boost to its operations in the region.
The Deal and the Project Details
The agreement involves a seven-year gas supply contract (GSA) with Puerto Rico’s power authority, aimed at providing a reliable and affordable supply of natural gas to the island’s electricity grid.
New Fortress Energy, a key player in LNG infrastructure, will source the gas from its facilities, including potentially from its Mexico LNG operations, to fuel existing and new power plants in Puerto Rico.
The project builds on NFE’s existing footprint in Puerto Rico, where it already operates facilities like the 150 MW gas-fueled power plant at Palo Seco and a 200+ MW facility in San Juan under shorter-term contracts.
This long-term deal is part of broader efforts to transition Puerto Rico’s energy mix toward cleaner and more cost-effective fuels, reducing reliance on imported oil and enhancing grid reliability amid frequent outages and high demand.
It also aligns with plans for a new 560 MW combined-cycle gas plant in San Juan, which could further expand NFE’s role in the island’s energy infrastructure.
The tentative approval from regulators marks a milestone, though final clearances are pending, and the deal is expected to commence operations soon after.
New Fortress Energy’s Latest Earnings: A Challenging Picture
New Fortress Energy’s most recent financial results paint a picture of ongoing struggles. For the third quarter of 2025, ending September 30, the company reported revenue of $327.4 million, a significant decline from $567.5 million in the same quarter the previous year.
This drop contributed to a net loss of $293.4 million, compared to a net income of $11.3 million in Q3 2024—a staggering 2693% deterioration.
Earnings per share (EPS) came in at -$1.02 on a normalized basis, missing analyst expectations by $0.18, while GAAP EPS was -$1.07, missing by $1.18.
The company’s financial health is further strained by high debt levels, with long-term debt standing at $7.8 billion as of mid-2025.
Negative return on equity of 43.91% and a net margin of -72.92% underscore operational inefficiencies and market pressures.
Additionally, NFE recently entered a forbearance agreement with lenders, extending interest payment deadlines from November 17 to December 15, 2025, signaling liquidity concerns.
These issues led to a delay in filing the Q3 2025 report, highlighting internal challenges.
Looking back at Q2 2025, the trends were similar: adjusted EBITDA was negative at -$4 million, with a net loss of $557 million.
Operations and maintenance costs rose slightly year-over-year, adding to the burden.
Forward-Looking Statements: Cautious Optimism Amid Risks
In its regulatory filings and earnings releases, New Fortress Energy has emphasized forward-looking statements that highlight potential growth opportunities while acknowledging risks.
The company expects the remainder of 2025 to see impacts from ongoing projects, including expansions in Latin America and the Caribbean, with a focus on core business improvements.
However, these projections are tempered by uncertainties such as market volatility, regulatory hurdles, and financial constraints. NFE notes that actual results could differ materially due to factors like commodity prices, supply chain issues, and debt servicing obligations.
The Puerto Rico deal is positioned as a key positive in these outlooks, potentially providing stable revenue streams and enhancing the company’s LNG supply chain integration.
ir.newfortressenergy.com
Implications for Investors
For investors, this tentative approval offers a glimmer of hope in an otherwise turbulent period for New Fortress Energy. The $3.2 billion contract could lock in long-term cash flows, helping to offset recent losses and support debt management.
With operations already proving reliable—boasting 98% availability in Puerto Rico facilities—the deal might strengthen NFE’s position in emerging markets and contribute to earnings recovery in 2026 and beyond.
That said, the company’s financial woes cannot be ignored. Persistent net losses, high debt, and recent forbearance agreements raise red flags about sustainability.
Analysts project a Q4 2025 EPS of -$0.89, indicating continued challenges.
Investors should monitor final regulatory approvals for the Puerto Rico deal, as well as any updates on liquidity and restructuring efforts. While the stock has faced downward pressure—trading with a forward dividend yield of 30.53% amid volatility—this development could be a catalyst for a turnaround if executed smoothly.
In summary, the tentative OK for the Puerto Rico deal represents a strategic win for New Fortress Energy, potentially stabilizing its operations in a key market. However, investors must weigh this against the backdrop of weak earnings and financial strain to assess the overall risk-reward profile.
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