Cheniere Energy, Inc. Quarterly Report for Q3 Ended Sep 30, 2020

Summary

Cheniere Energy, Inc. reported its financial results for the third quarter and the first nine months of 2020. For the quarter ended September 30, 2020, the company reported a net loss attributable to common stockholders of $463 million, or $1.84 per share, a widening of the loss compared to the same period in 2019. This was primarily driven by prior period elections by customers to not take delivery of LNG cargoes, leading to accelerated revenue recognition in prior periods and a decrease in current period revenues. However, for the nine months ended September 30, 2020, Cheniere Energy reported a net income attributable to common stockholders of $109 million, or $0.43 per share, a significant improvement from a net loss in the comparable period of 2019. This turnaround was largely due to increased LNG volumes available from newly operational trains and favorable commodity derivative gains. The company continues to progress on its major liquefaction projects, with Train 3 at Corpus Christi undergoing commissioning and Train 6 at Sabine Pass approximately 70.9% complete. Despite the quarterly loss, the company's highly contracted business model and fixed fee structures provide revenue visibility.

Key Highlights

• 1For the nine months ended September 30, 2020, Cheniere reported a net income of $109 million, a significant improvement from a net loss of $291 million in the same period of 2019, driven by increased LNG volumes and derivative gains.
• 2The company experienced a net loss of $463 million ($1.84/share) in the third quarter of 2020, an increase from the $318 million loss in Q3 2019, mainly due to accelerated revenue recognition in prior periods related to customer cargo cancellations.
• 3Total revenues decreased by $710 million in Q3 2020 and $152 million for the nine months ended September 30, 2020, compared to the prior year periods, primarily due to revenue recognition impacts from customer cargo cancellations and lower LNG marketing volumes.
• 4Operating costs and expenses decreased by $475 million in Q3 2020 and $1.16 billion for the nine months ended September 30, 2020, mainly due to lower cost of sales stemming from reduced natural gas feedstock prices and volumes, and lower vessel charter costs.
• 5Debt refinancing activities led to significant "Loss on modification or extinguishment of debt" totaling $215 million for the nine months ended September 30, 2020.
• 6The company's key projects are progressing, with Train 3 at Corpus Christi undergoing commissioning and Train 6 at Sabine Pass approximately 70.9% complete.
• 7Despite the quarterly loss, Cheniere's substantial backlog of long-term contracts with fixed fee components provides a strong revenue outlook.

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