01—Abstract
Summary
Summary of the 8-K filed May 3, 2024. Cited figures are marked; the original filing is the authoritative source.
Cheniere Energy Partners, L.P.
(NYSE: CQP) reported first quarter 2024 results in a press release furnished as Exhibit 99.1 to this Form 8-K dated May 3, 2024. For the three months ended March 31, 2024, revenues were $2.3 billiona (versus $2.9 billion in the prior-year period), net income was $682 million (versus $1.9 billion), and Adjusted EBITDA was $1.0 billion (versus $1.03 billion). The filing attributes the net income decline primarily to an approximately $1.2 billion unfavorable change in fair value of derivative instruments, from a $1.3 billion gain to a $43 million gain, and attributes the Adjusted EBITDA decline of about $26 million primarily to lower total margins per MMBtu of LNG delivered.
The partnership reconfirmed full-year 2024 distribution guidance of $3.15 to $3.35b per common unit, maintaining a base distribution of $3.10 per common unit. It declared a first-quarter cash distribution of $0.810 per common unit, comprised of a $0.775 base amount and a $0.035 variable amount, payable May 15, 2024 to unitholders of record as of May 9, 2024.
Total available liquidity was approximately $2.1 billionc as of March 31, 2024, and SPL prepaid $150 million of its 5.750% Senior Secured Notes due 2024 during the quarter. The release also notes that in February 2024 subsidiaries applied to FERC to site, construct and operate the SPL Expansion Project, an expansion with expected total production capacity of up to approximately 20 mtpa, and applied to the DOE for authorization to export LNG to FTA and non-FTA countries.
02—Key points
Key Highlights
- Revenues of $2,295 million for Q1 2024, down from $2,917 million in Q1 2023.
- Net income of $682 million, down from $1,935 million, primarily due to a derivative fair value gain of $43 million versus $1.3 billion in the prior-year period.
- Adjusted EBITDA of $1,000 million, compared with $1,026 million a year earlier, mainly reflecting lower total margins per MMBtu of LNG delivered.
- LNG exports of 114 cargoes (418 TBtu), compared with 112 cargoes (403 TBtu) in Q1 2023.
- Reconfirmed full-year 2024 distribution guidance of $3.15 to $3.35 per common unit; declared a Q1 2024 distribution of $0.810 per common unit, payable May 15, 2024.
- Total available liquidity of approximately $2.1 billion as of March 31, 2024, including $333 million of cash and cash equivalents.
- Submitted FERC and DOE applications in February 2024 for the SPL Expansion Project, with expected capacity of up to approximately 20 mtpa.
03—Questions
Frequently Asked Questions
Why did net income fall so sharply in the first quarter of 2024?
The filing states the decline was primarily due to an approximately $1.2 billion unfavorable change in the fair value of derivative instruments, which moved from a $1.3 billion gain in Q1 2023 to a $43 million gain in Q1 2024. Substantially all derivative gains relate to long-term Integrated Production Marketing agreements, which are marked to market while the related LNG sales are not.
Is the distribution to unitholders changing?
The partnership reconfirmed full-year 2024 distribution guidance of $3.15 to $3.35 per common unit and maintained a base distribution of $3.10 per common unit. For Q1 2024 it declared a distribution of $0.810 per common unit, consisting of a $0.775 base amount and a $0.035 variable amount, payable May 15, 2024 to holders of record as of May 9, 2024.
What drove the decline in Adjusted EBITDA?
Adjusted EBITDA decreased by approximately $26 million to $1.0 billion, primarily due to lower total margins per MMBtu of LNG delivered compared with the prior-year period.
What growth projects is the company pursuing?
The company is developing the SPL Expansion Project adjacent to the Sabine Pass facility, with expected total production capacity of up to approximately 20 mtpa including debottlenecking opportunities. In February 2024, subsidiaries submitted an application to FERC to site, construct and operate the project and an application to DOE to export LNG to FTA and non-FTA countries, both excluding debottlenecking.
How much liquidity does the partnership have and how is it managing debt?
As of March 31, 2024, total available liquidity was approximately $2.1 billion, including $333 million of cash and cash equivalents, $59 million of current restricted cash, $1.0 billion of available commitments under the Cheniere Partners Revolving Credit Facility, and $728 million under the SPL Revolving Credit Facility. During the quarter SPL prepaid $150 million of its 5.750% Senior Secured Notes due 2024 with cash on hand.
04—Continue