Cheniere Energy falls short of core profit estimates on lower LNG margins
Adds Cheniere's high level of LNG contracts and its confidence that recent court decisions won't hurt its ability to get plants built, in paragraphs 7-8 and 13
By Tanay Dhumal and Curtis Williams
Aug 8 (Reuters) -Cheniere Energy LNG.N fell short of its second-quarter core profit estimates on Thursday, as weaker margins hurt the liquefied natural gas (LNG) producer.
Lower natural gas prices NGc1, which are down about 16% this year due to higher global inventories and lower demand forecasts, hurt the company's LNG delivery margins.
LNG revenue fell to $3.04 billion in the quarter ended June 30 from $3.92 billion a year earlier, and Cheniere's adjusted core profit of $1.32 billion missed an average analyst estimate of $1.35 billion as compiled by LSEG.
Cheniere's marginally raised full-year core profit forecast of between $5.7 billion and $6.1 billion, up from $5.5 billion to $6 billion previously, also came below analysts' expectations of $6.01 billion at midpoint, according to LSEG data.
The company, however, said it had a more constructive outlook for the remainder of the year, betting on higher demand from Asia.
"Cheniere continues to execute on its capital return strategy through its share repurchase and previously announced dividend. LNG should perform in line with the broader group on generally inline quarterly results and full-year expectations," RBC Capital Market analyst Elvira Scotto said.
Cheniere has been successful in getting companies to sign long-term offtake agreements and if approved it can contract all the LNG from its proposed Corpus Christi midscale expansion, paving the way for construction of trains 8 and 9 and debottlenecking, said its Chief Financial Officer, Zach Davis on an earnings call on Thursday.
Contracts signed between Cheniere and firms like Portugal's Galp GALP.LS may be enough to even reach a financial go ahead for the first phase of expansion at its Sabine Pass plant, said Davis.
Cheniere's Corpus Christi Stage 3 project, an export facility in South Texas, is progressing ahead of schedule, and was 62.4% complete as of June 30.
First gas into Train 1 of the project is expected in the next couple of months, with first LNG still projected by the end of the year, and LNG from the three Trains in 2025, said Cheniere President Jack Fusco on the earnings call.
Cheniere was able to do its major maintenance turnaround work on both its Sabine Pass and Corpus Christi plants without any major outage, which will help make up for lost LNG supplies experienced during the freeze in early 2024, said Fusco.
The Stage 3 project is expected to add 10 million metric tons per annum (mtpa) of LNG to Cheniere's production capacity of 15 mtpa at the Corpus Christi export facility.
Cheniere is not worried about recent U.S. court rulings that effectively ended the Federal Energy Regulatory Agency's (FERC) approval for two LNG export projects, as Cheniere had no ongoing court cases on its producing plants and is very detailed in the way it goes about navigating the regulatory process, said Fusco.
Financial firm Tudor Pickering Holt said the results were positive even though Cheniere suffered from reduced core profit due to lower margins.
"We view the print as a positive with projects progressing and feed gas expected at Stage Three, combined with their guidance increase," TPH said in a morning note to clients.
Cheniere's business and products are bi-partisan, since it promotes energy independence, benefits international trade, and LNG transcends any election cycle, said Fusco, who said Cheniere expects to maintain its Washington relationships regardless of who wins the U.S. presidential election.
Reporting by Tanay Dhumal in Bengaluru and Curtis Williams in Houston; Editing by Jonathan Oatis and David Holmes, Kirsten Donovan
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
