Cheniere Energy's Mixed Q2 Results: Earnings Decline Amid Lower Gas Prices

Cheniere Energy, Inc. LNG reported second-quarter FY24 revenue of $3.251 billion, down 21% Y/Y, missing the consensus of $3.518 billion. 

Adjusted EBITDA declined 29% Y/Y to $1.32 billion, mainly due to lower international gas prices and a higher proportion of LNG sold under long-term contracts, which reduced margins per MMBtu of LNG delivered.

The company exported 553 TBtu of LNG during the quarter. As of June-end, 30 TBtu of LNG was in transit and sold on a delivered basis, unrelated to commissioning activities.

As of August 2, the company has produced, loaded, and exported approximately 3,570 LNG cargoes, totaling over 245 million tonnes from our liquefaction projects. EPS of $3.84 exceeded the consensus of $1.69 in the quarter.

Distributable Cash Flow stood at approximately $0.7 billion in the quarter. Cheniere repurchased over 3.1 million shares for about $496 million, repaid $150 million in debt, and paid quarterly dividends of $0.435 per share.

In July 2024, Cheniere Marketing signed a long-term LNG sale and purchase agreement with Galp Trading. Under this agreement, Galp will buy about 0.5 million tonnes per annum of LNG on a free-on-board basis starting in the early 2030s, contingent on a positive Final Investment Decision for the second train of the SPL Expansion Project.

Jack Fusco, Cheniere’s President and Chief Executive Officer said, “Our strong financial and operational results year-to-date, coupled with our constructive outlook for the remainder of the year, have enabled us to increase our full year 2024 Consolidated Adjusted EBITDA and Distributable Cash Flow guidance ranges.”

“For the remainder of the year, we are focused on executing on our recently updated capital allocation plan and upholding our track record for operational excellence and safety while advancing future growth across our leading infrastructure platform to reliably meet the energy needs of our customers worldwide.”

As of June 30, cash and cash equivalents stood at $2.9 billion. In June 2024, Cheniere declared a second-quarter dividend of $0.435 per share, payable on August 16, 2024.

Outlook: Cheniere Energy raised FY24 adjusted EBITDA outlook to $5.7 billion – $6.1 billion (from $5.5 billion – $6.0 billion) and Distributable Cash Flow to $3.1 billion to $3.5 billion from $2.9 billion – $3.4 billion.

In June 2024, Cheniere updated its ’20/20 Vision’ long-term capital allocation plan, boosting its share repurchase authorization by $4 billion through 2027.

The company also planned to increase its quarterly dividend by about 15% to $2.00 per share annually, starting in the third quarter of 2024, subject to Board declaration.

Investors can gain exposure to the stock via Listed Funds Trust Roundhill Alerian LNG ETF LNGG and Exchange Traded Concepts Trust Range Global LNG Ecosystem Index ETF LNGZ.

Price Action: LNG shares are up 0.43% at $178.42 at the last check Thursday.

Photo via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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