Summary
Cheniere Energy, Inc. reported a net loss of $82.7 million for the first quarter of 2009, an increase from the $49.9 million net loss in the same period of 2008. This widening loss was primarily driven by a significant increase in interest expense due to additional debt issuances and a decrease in capitalized interest as the Sabine Pass LNG receiving terminal transitioned from development to operational status. Depreciation, depletion, and amortization also rose as new assets were placed into service. The company's balance sheet shows total assets of approximately $2.89 billion and a total deficit of $445 million. Significant assets include Property, Plant, and Equipment at $2.21 billion, largely comprising LNG terminal construction-in-process and related costs. The company's liquidity is supported by $81.5 million in unrestricted cash and $409.1 million in restricted cash and equivalents, which are earmarked for specific purposes such as interest payments and construction. Operationally, Cheniere is progressing with its Sabine Pass LNG receiving terminal, which has fully reserved regasification capacity under long-term agreements with Total and Chevron, expected to commence significant fee payments starting April 1, 2009, and July 1, 2009, respectively. The company also advanced construction on its Creole Trail Pipeline. Despite the ongoing net losses, management believes it has sufficient liquidity to fund its operations and business strategies for the foreseeable future.
Key Highlights
- 1Net loss increased to $82.7 million in Q1 2009 from $49.9 million in Q1 2008, primarily due to higher interest expenses and increased depreciation.
- 2Total assets stood at approximately $2.89 billion, with Property, Plant, and Equipment representing the largest asset class ($2.21 billion).
- 3The company held $81.5 million in unrestricted cash and $409.1 million in restricted cash and equivalents as of March 31, 2009.
- 4Sabine Pass LNG receiving terminal's regasification capacity is fully contracted under long-term Terminal Use Agreements (TUAs) with Total and Chevron, with significant fee payments expected to commence soon.
- 5Construction on the Sabine Pass LNG receiving terminal and Creole Trail Pipeline is progressing, with the former transitioning to operational status.
- 6Long-term debt remained substantial, totaling over $3.17 billion as of March 31, 2009.
- 7Subsequent to the quarter, Cheniere reduced its debt by exchanging $77.2 million of Convertible Senior Unsecured Notes for cash and common shares.