Summary
Cheniere Energy, Inc. (LNG) reported significant revenue growth driven by the ramp-up of its Sabine Pass LNG (SPL) Project, with Train 4 becoming operational in October 2017. Total revenues increased substantially year-over-year to $1.403 billion for the third quarter of 2017. Despite this top-line growth, the company reported a net loss attributable to common stockholders of $289 million for the quarter, widening from a loss of $101 million in the prior year. This was largely due to increased allocation of net income to non-controlling interests, higher interest expenses stemming from increased debt, and derivative-related losses. The company continued to expand its debt facilities and issued new senior notes to fund its ongoing development of both the Sabine Pass and Corpus Christi LNG (CCL) projects, underscoring its aggressive growth strategy and substantial capital expenditure requirements. Key financial developments included a significant increase in property, plant, and equipment, reflecting ongoing construction. The company also actively managed its debt, issuing new notes and prepaying existing credit facilities. While operational performance is improving with more trains coming online, the company remains highly leveraged. Investors should closely monitor the successful completion and ramp-up of the CCL project and the company's ability to manage its substantial debt obligations.
Financial Highlights
48 data points| Revenue | $1.40B |
| Cost of Revenue | $824.00M |
| Gross Profit | $579.00M |
| R&D Expenses | $3.00M |
| SG&A Expenses | $64.00M |
| Operating Expenses | $1.11B |
| Operating Income | $297.00M |
| Interest Expense | $186.00M |
| Net Income | -$289.00M |
| EPS (Basic) | $-1.24 |
| EPS (Diluted) | $-1.24 |
| Shares Outstanding (Basic) | 232.60M |
| Shares Outstanding (Diluted) | 232.60M |
Key Highlights
- 1Revenue surged to $1.403 billion in Q3 2017, a substantial increase from $465 million in Q3 2016, driven by the operationalization of more liquefaction trains at the Sabine Pass LNG Project.
- 2Net loss attributable to common stockholders widened to $289 million ($1.24/share) in Q3 2017, from $101 million ($0.44/share) in Q3 2016, primarily due to higher non-controlling interest allocations and increased interest expenses.
- 3Total assets grew to $27.134 billion as of September 30, 2017, from $23.703 billion at the end of 2016, reflecting significant ongoing capital expenditures in property, plant, and equipment, largely for project development.
- 4Long-term debt increased to $24.923 billion from $21.688 billion year-over-year, indicating continued financing of large-scale infrastructure projects.
- 5Cheniere issued new debt during the period, including $800 million in 2037 SPL Senior Notes and $1.35 billion in 2028 SPL Senior Notes, as well as $1.5 billion in 2027 CCH Senior Notes and $1.5 billion in 2025 CQP Senior Notes, to fund construction and refinance existing debt.
- 6Operating cash flows turned positive, reaching $895 million for the nine months ended September 30, 2017, a significant improvement from negative $319 million in the prior year period, due to increased LNG sales.
- 7Train 4 at the Sabine Pass LNG Project achieved substantial completion in October 2017, following Trains 1-3 already being operational, and Train 5 is under construction, indicating continued progress in expanding export capacity.