10-QPeriod: Q2 FY2018

Cheniere Energy, Inc. Quarterly Report for Q2 Ended Jun 30, 2018

Filed August 9, 2018For Securities:LNG

Summary

Cheniere Energy, Inc. reported strong revenue growth for the six months ended June 30, 2018, driven by increased LNG volumes from its Sabine Pass Liquefaction (SPL) Project, with Trains 1-4 operational. Total revenues increased by 54% to $3.79 billion compared to the prior year period. Despite the revenue growth, the company reported a net loss attributable to common stockholders of $18 million for the second quarter of 2018, compared to a loss of $285 million in the same period last year. This improvement was attributed to reduced non-cash amortization charges and increased operational income. The company made significant progress on its Corpus Christi Liquefaction (CCL) Project, with Stage 1 (Trains 1 & 2) at 89.9% completion and Stage 2 (Train 3) at 28.7% completion. The Corpus Christi Pipeline construction was completed in Q2 2018. Cheniere also took a positive Final Investment Decision (FID) for Stage 2 of the CCL Project in May 2018. The company also amended and restated its credit facilities for the CCL Project, increasing commitments to $6.1 billion, indicating continued investment in growth. Financially, Cheniere raised significant capital through debt issuances and credit facility amendments to support ongoing project development. While long-term debt remains substantial, the company's liquidity position appears stable with significant available commitments under its credit facilities. Investors should monitor the progression of the CCL Project and future capacity expansions, as well as the company's ability to manage its significant debt load.

Financial Highlights

49 data points
Beta

Revenue

$1.54B

43.4% Gross Margin

Net Income

-$18.00M

-1.2% Net Margin

EPS (Diluted)

$-0.07

Total Assets

$30.33B

Cash & Equivalents

$874.00M

Free Cash Flow

-$219.00M

Financial Statements
Beta
Revenue$1.54B
Cost of Revenue$873.00M
Gross Profit$670.00M
R&D Expenses$3.00M
SG&A Expenses$73.00M
Operating Expenses$1.21B
Operating Income$336.00M
Interest Expense$216.00M
Net Income-$18.00M
EPS (Basic)$-0.07
EPS (Diluted)$-0.07
Shares Outstanding (Basic)242.80M
Shares Outstanding (Diluted)242.80M

Key Highlights

  • 1Revenue surged by 54% year-over-year for the six months ended June 30, 2018, reaching $3.79 billion, driven by increased LNG volumes from operational Trains at the Sabine Pass Liquefaction (SPL) Project.
  • 2Net loss attributable to common stockholders improved significantly, from $285 million in Q2 2017 to $18 million in Q2 2018, mainly due to reduced non-cash amortization and increased operational income from more operational Trains.
  • 3Positive Final Investment Decision (FID) for Stage 2 of the Corpus Christi Liquefaction (CCL) Project was made in May 2018, signaling continued development and investment in new liquefaction capacity.
  • 4Construction of the Corpus Christi Pipeline was completed in the second quarter of 2018, a key infrastructure component for the CCL Project.
  • 5The company amended and restated its credit facilities for the CCL Project, increasing total commitments to $6.1 billion, demonstrating continued access to financing for growth projects.
  • 6Cheniere is actively expanding its project pipeline, filing an application for Corpus Christi Stage 3 with seven midscale Trains and continuing development of other potential infrastructure projects.
  • 7As of June 30, 2018, the company had total assets of $30.3 billion and total liabilities of $28.6 billion, with long-term debt, net, at $26.8 billion.

Frequently Asked Questions

For the six months ended June 30, 2018, Cheniere reported total revenues of $3.79 billion, a substantial increase from $2.45 billion in the prior year period. This growth was primarily driven by increased LNG volumes from its Sabine Pass Liquefaction (SPL) Project as more Trains became operational. While revenue improved significantly, the company recorded a net loss attributable to common stockholders of $18 million for the second quarter of 2018, an improvement from a $285 million loss in the same quarter of 2017. The reduction in net loss was influenced by factors such as decreased non-cash amortization and increased operating income.

Cheniere is actively developing the Corpus Christi Liquefaction (CCL) Project, which is being constructed in stages. Stage 1, comprising Trains 1 and 2, was 89.9% complete as of June 30, 2018. Stage 2, including Train 3, was 28.7% complete. The construction of the Corpus Christi Pipeline, essential for the CCL Project, was completed in the second quarter of 2018. Cheniere also made a positive Final Investment Decision (FID) for Stage 2 of the CCL Project in May 2018, indicating confidence and commitment to its expansion.

Cheniere continues to utilize a mix of debt and equity to finance its significant capital expenditures. In May and June 2018, the company amended and restated its credit facilities for the CCL Project, increasing total commitments to $6.1 billion and its working capital facility to $1.2 billion, demonstrating continued access to debt markets. Long-term debt remains substantial, totaling $26.8 billion as of June 30, 2018, underscoring the capital-intensive nature of its LNG infrastructure projects.

Yes, the report notes significant commercial developments. In February 2018, Cheniere entered into two SPAs with PetroChina International Company Limited for the sale of approximately 1.2 mtpa of LNG through 2043. Additionally, in January 2018, it signed a 15-year SPA with Trafigura Pte Ltd for approximately 1 mtpa of LNG starting in 2019. Furthermore, the dates of first commercial delivery were reached under SPAs with BG Gulf Coast LNG, LLC for Train 3 of the SPL Project and with GAIL (India) Limited for Train 4 of the SPL Project.