10-QPeriod: Q1 FY2018

Cheniere Energy, Inc. Quarterly Report for Q1 Ended Mar 31, 2018

Filed May 4, 2018For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) reported a significant increase in net income attributable to common stockholders for the first quarter of 2018, reaching $357 million, or $1.50 per diluted share, a substantial rise from $54 million, or $0.23 per diluted share, in the same period of 2017. This improvement was driven by the operation of additional liquefaction trains at the Sabine Pass LNG terminal and a notable increase in derivative gains. Total revenues more than doubled year-over-year, reaching $2.24 billion from $1.21 billion, primarily due to higher LNG revenues reflecting increased volumes from operational trains. The company continues to advance its strategic projects, including the construction of Train 5 at Sabine Pass and the Corpus Christi LNG terminal. Significant commercial developments include new LNG Sale and Purchase Agreements (SPAs) with PetroChina International Company Limited and Trafigura Pte Ltd, bolstering future revenue streams. While capital expenditures remain substantial due to ongoing construction, the company reported strong operating cash flows and adequate liquidity to fund its development pipeline and meet its financial obligations.

Financial Highlights

48 data points
Beta

Revenue

$2.24B

47.5% Gross Margin

Net Income

$357.00M

15.9% Net Margin

EPS (Diluted)

$1.50

Total Assets

$28.34B

Cash & Equivalents

$715.00M

Free Cash Flow

-$307.00M

Financial Statements
Beta
Revenue$2.24B
Cost of Revenue$1.18B
Gross Profit$1.06B
R&D Expenses$1.00M
SG&A Expenses$67.00M
Operating Expenses$1.50B
Operating Income$747.00M
Interest Expense$216.00M
Net Income$357.00M
EPS (Basic)$1.52
EPS (Diluted)$1.50
Shares Outstanding (Basic)235.50M
Shares Outstanding (Diluted)238.00M

Key Highlights

  • 1Net income attributable to common stockholders surged to $357 million ($1.50/diluted share) from $54 million ($0.23/diluted share) in Q1 2017, driven by increased operational capacity and derivative gains.
  • 2Total revenues more than doubled to $2.24 billion from $1.21 billion year-over-year, primarily due to higher LNG volumes from additional operational trains at Sabine Pass.
  • 3Construction of Train 5 at Sabine Pass is progressing, with 89.3% completion, and the Corpus Christi LNG terminal (Stage 1) is 85.7% complete.
  • 4New long-term SPAs were signed with PetroChina International Company Limited and Trafigura Pte Ltd, securing future sales volumes.
  • 5Operating cash flow increased to $469 million from $309 million, supporting ongoing capital investments.
  • 6The company has a robust project pipeline with continued development of the Corpus Christi Expansion Project.
  • 7Liquidity remains strong with $715 million in cash and cash equivalents and significant available commitments under various credit facilities.

Frequently Asked Questions

The substantial increase in revenue and net income is primarily attributed to the addition of operational liquefaction trains at the Sabine Pass LNG terminal. Trains 3 and 4 became operational in March and October 2017, respectively, significantly increasing the volume of LNG sold. Additionally, a favorable shift in the long-term forward LIBOR curve contributed to higher derivative gains.

Train 5 at the Sabine Pass LNG terminal is approximately 89.3% complete and is expected to reach substantial completion in the first half of 2019. Stage 1 of the Corpus Christi LNG terminal, including Trains 1 and 2, is approximately 85.7% complete and is expected to reach substantial completion for Train 1 in the first half of 2019 and for Train 2 in the second half of 2019. The Corpus Christi Pipeline construction is expected to be completed in the second quarter of 2018.

Cheniere has a substantial amount of long-term debt, primarily related to project financing for its liquefaction facilities. As of March 31, 2018, total long-term debt was approximately $25.7 billion. However, the company maintains a strong liquidity position with $715 million in cash and cash equivalents and over $3.6 billion in available commitments under its various credit facilities, enabling it to fund ongoing construction and operational needs. The company's strategy relies on project-specific debt and operating cash flows for its subsidiaries, and various financing sources for Cheniere itself.

In early 2018, Cheniere entered into significant new long-term LNG Sale and Purchase Agreements (SPAs). These include agreements with PetroChina International Company Limited for approximately 1.2 million tonnes per annum (mtpa) of LNG through 2043 and with Trafigura Pte Ltd for approximately 1 mtpa of LNG beginning in 2019. These agreements further underpin the contracted volumes for their export facilities.