10-QPeriod: Q2 FY2021

Cheniere Energy, Inc. Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 5, 2021For Securities:LNG

Summary

Cheniere Energy, Inc. (LNG) reported revenues of $3.02 billion for the second quarter of 2021, a significant increase from $2.40 billion in the same period of 2020. This growth was driven by higher LNG revenues, reflecting improved market prices and increased volumes delivered, as well as the non-recurrence of a prior year event where customers did not take delivery of LNG cargoes. Despite revenue growth, the company reported a net loss attributable to common stockholders of $329 million, or $(1.30) per share, compared to a net income of $197 million, or $0.78 per share, in the prior year's second quarter. This loss was largely due to significant derivative-related losses, primarily from unfavorable shifts in international commodity forward curves. Operationally, the company continues to progress with its liquefaction projects, with Train 3 of the Corpus Christi LNG Project achieving substantial completion in March 2021, and Train 6 at the Sabine Pass LNG Project nearing completion with 89.6% overall project completion as of June 30, 2021. The company's balance sheet shows total assets of $36.75 billion and total liabilities of $34.40 billion. Liquidity remains solid with $1.81 billion in cash and cash equivalents, supported by substantial available commitments under its various credit facilities.

Financial Statements
Beta
Revenue$3.02B
R&D Expenses$2.00M
SG&A Expenses$73.00M
Operating Expenses$2.87B
Operating Income$146.00M
Interest Expense$368.00M
Net Income-$329.00M
EPS (Basic)$-1.30
EPS (Diluted)$-1.30
Shares Outstanding (Basic)253.50M
Shares Outstanding (Diluted)253.50M

Key Highlights

  • 1Total revenues increased by 25.6% to $3.02 billion in Q2 2021 compared to $2.40 billion in Q2 2020, driven by higher LNG revenues.
  • 2Net loss attributable to common stockholders was $(329) million, or $(1.30) per share, a significant decrease from a net income of $197 million, or $0.78 per share, in Q2 2020.
  • 3The decrease in net income was primarily attributed to a $472 million increase in derivative-related after-tax losses in Q2 2021.
  • 4Construction of Train 6 at the Sabine Pass LNG Project is progressing well, with overall project completion at 89.6% as of June 30, 2021, and expected substantial completion in the first half of 2022.
  • 5Substantial completion of Train 3 at the Corpus Christi LNG Project was achieved on March 26, 2021.
  • 6Total debt decreased from $30.84 billion at year-end 2020 to $30.28 billion at June 30, 2021.
  • 7The company continues to secure long-term agreements, with approximately 85% of the total production capacity from its Liquefaction Projects contracted on a term basis, with a weighted average remaining life of approximately 17 years.

Frequently Asked Questions

The significant drop in net income to a loss of $329 million in Q2 2021 from income of $197 million in Q2 2020 was primarily driven by an increase in derivative-related after-tax losses. These losses amounted to $674 million pre-tax in Q2 2021, largely due to unfavorable shifts in international forward commodity curves. Additionally, the prior year benefited from accelerated revenues recognized from LNG cargoes that customers did not take delivery of, an event that did not occur in the current quarter.

Cheniere is making steady progress on its expansion projects. Train 3 of the Corpus Christi LNG Project achieved substantial completion in March 2021. Construction of Train 6 at the Sabine Pass LNG Project is well underway, with 89.6% overall completion as of June 30, 2021, and is expected to be substantially completed in the first half of 2022. The company also continues development on Corpus Christi Stage 3, which includes up to seven midscale Trains.

Cheniere's total debt decreased from $30.84 billion at the end of 2020 to $30.28 billion as of June 30, 2021. The company has been actively refinancing its debt, such as the issuance of $1.5 billion in Senior Notes by Cheniere Partners in March 2021 to refinance existing notes. Additionally, during the first six months of 2021, Cheniere repaid approximately $624 million in outstanding indebtedness under its Term Loan Facility and convertible notes.

Cheniere has secured a strong contracted position for its existing liquefaction capacity. Approximately 85% of the total production capacity from the Sabine Pass and Corpus Christi Liquefaction Projects is contracted on a term basis. These contracts have a weighted average remaining life of approximately 17 years, providing a stable revenue stream.