The dividend policy is being updated with a goal to provide a clear go-forward framework to NFE’s shareholders. Effective immediately, NFE is targeting an annual cash dividend equal to approximately 40% of its annual Adjusted EBITDA. In connection with adopting this dividend policy, the Board today declared a dividend of $3.00 per share, with a record date of January 4, 2023, and a payment date of January 13, 2023.
The dividend declared today, on an annualized basis, equates to approximately 40% of NFE’s Illustrative Adjusted EBITDA Goal of $2.5+ billion for FY2023. The Board will evaluate whether to declare a dividend every six months.
“Our business is now generating significant, stable, and growing cash, which we believe affords us the ability to both retain capital necessary to grow and return excess capital to shareholders in the form of meaningful dividends,” said Wes Edens, Chairman and CEO of NFE. “We are fortunate to have a strong balance sheet and the liquidity we believe is necessary to execute our strategy and achieve our goals, matching long-term LNG supply with long-term power demand around the world.”
NFE expects to generate more than $11 billion of additional liquidity over the next three years, which it plans to use primarily to facilitate accretive investments, including investments in floating LNG facilities and downstream capital expenditures, and to pay significant dividends to shareholders.
In addition to these priorities, other objectives of the dividend policy announced today include maintaining a strong and durable balance sheet, reducing our leverage ratio to below 1.0x by year-end 2025, allowing the Company to initiate a share buyback program, and achieving and maintaining an investment grade rating.
“Over the years, we have found that the best companies are extremely disciplined about their use of capital and return to their shareholders the amounts they do not need,” continued Mr. Edens. “We believe the policy we are announcing today will promote the continued growth and success of our business while allowing us to exercise proper stewardship of our capital.”
The payment of future dividends under the dividend policy being announced today will be made at the discretion of the Board and will be subject to the Board’s final determination based on a number of factors, including, but not limited to, the Company’s financial performance, its available cash resources, the terms of its indebtedness, its cash requirements, credit rating impacts, alternative uses of cash that the Board may conclude would represent an opportunity to generate a greater return on investment for the Company, restrictions and other factors the Board deems relevant at the time it determines to declare such dividends, and under applicable law. The dividend policy may be revised, suspended, or cancelled at the discretion of the Board at any time.
Management will host a conference call on Tuesday, December 13, 2022, at 8:00 A.M. Eastern Time. The conference call may be accessed by dialing (888) 254-3590 (toll free from within the U.S.) or +1-323-994-2093 (from outside of the U.S.) fifteen minutes prior to the scheduled start of the call; please reference “NFE Investor Update” or conference code 5194206.
A simultaneous webcast of the conference call will be available to the public on a listen-only basis at www.newfortressenergy.com within the “Investors” tab under “Events & Presentations.” Please allow extra time prior to the call to visit the website and download any necessary software required to listen to the internet broadcast. A replay of the conference call will be available at the same website location shortly after the conclusion of the live call.
For additional information that management believes to be useful for investors, please refer to the presentation posted on the Investors section of New Fortress Energy’s website, www.newfortressenergy.com, and the Company’s most recent SEC filings, also available on the Company’s website. Nothing on our website is included or incorporated by reference herein.
About New Fortress Energy
New Fortress Energy Inc. (NASDAQ: NFE) is a global energy infrastructure company founded to help address energy poverty and accelerate the world’s transition to reliable, affordable, and clean energy. The company owns and operates natural gas and liquefied natural gas (LNG) infrastructure, ships and logistics assets to rapidly deliver turnkey energy solutions to global markets. Collectively, the company’s assets and operations seek to support global energy security, enable economic growth, enhance environmental stewardship, and transform local industries and communities around the world.