10-QPeriod: Q1 FY2020

Cheniere Energy, Inc. Quarterly Report for Q1 Ended Mar 31, 2020

Filed April 30, 2020For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) reported strong financial performance for the first quarter of 2020, with net income attributable to common stockholders increasing significantly to $375 million ($1.48/share basic, $1.43/share diluted) from $141 million ($0.55/share basic, $0.54/share diluted) in the prior year's quarter. This growth was driven by increased LNG revenues, up $425 million year-over-year, largely due to higher volumes from additional operational liquefaction trains at both the Sabine Pass and Corpus Christi facilities. Despite lower per-MMBtu pricing, overall revenue growth was robust. The company also highlighted its ongoing commitment to shareholder returns through its share repurchase program, repurchasing $155 million of its stock in the quarter. While acknowledging the macroeconomic impacts of COVID-19 and energy market volatility on future demand forecasts, Cheniere reiterated its confidence in its business model due to the highly contracted nature of its operations and the fixed fee component of its contracts, which are expected to mitigate significant financial impact from potential cargo cancellations. The company maintained strong liquidity with $2.4 billion in cash and cash equivalents.

Financial Highlights

49 data points
Beta

Revenue

$2.71B

Net Income

$375.00M

13.8% Net Margin

EPS (Diluted)

$1.43

Total Assets

$35.75B

Cash & Equivalents

$2.40B

Free Cash Flow

$18.00M

Financial Statements
Beta
Revenue$2.71B
R&D Expenses$4.00M
SG&A Expenses$81.00M
Operating Expenses$1.36B
Operating Income$1.35B
Interest Expense$412.00M
Net Income$375.00M
EPS (Basic)$1.48
EPS (Diluted)$1.43
Shares Outstanding (Basic)253.00M
Shares Outstanding (Diluted)299.60M

Key Highlights

  • 1Net income attributable to common stockholders surged to $375 million from $141 million in Q1 2019.
  • 2Total revenues increased by $448 million to $2.71 billion, driven by a $425 million increase in LNG revenues.
  • 3The company repurchased $155 million of its common stock during the quarter under its $1 billion share repurchase program.
  • 4Despite COVID-19 and market volatility, management expects minimal financial impact due to highly contracted business and fixed fees on cargo cancellations.
  • 5Operational capacity expanded with more liquefaction trains operational compared to the prior year period.
  • 6Cash and cash equivalents remained strong at $2.4 billion at the end of the quarter.

Frequently Asked Questions

The primary driver for the substantial increase in net income was the growth in LNG revenues, which rose by $425 million year-over-year. This was primarily due to an increase in the volume of LNG sold, as more liquefaction trains were operational at both the Sabine Pass and Corpus Christi facilities compared to the first quarter of 2019.

Cheniere expects minimal impact due to the highly contracted nature of its business. Many contracts include fixed fees that customers remain obligated to pay even if they exercise their right to cancel cargo deliveries. The company is also implementing precautionary measures at its facilities to protect employees, incurring approximately $30 million in additional costs for these measures.

During the first quarter of 2020, Cheniere repurchased approximately $155 million worth of its common stock. As of March 31, 2020, the company had approximately $596 million remaining under its $1 billion, 3-year share repurchase program authorized in June 2019.

In March 2020, SPL entered into a new $1.2 billion Working Capital Revolving Credit and Letter of Credit Reimbursement Agreement, which replaced its previous facility, lowered the interest rate, and extended the maturity date to March 2025. Additionally, CCH HoldCo II redeemed $300 million of its convertible senior notes in March 2020.