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GLNG COMMENTARY GLNG

Cheniere’s earnings top estimates

as LNG exports pick up

Leading US LNG producer Cheniere Energy’s second-quarter earnings beat analyst

expectations, with the results coming out as the country’s LNG exports are forecast

to rise for the first time in six months

PERFORMANCE CHENIERE Energy, the US’ largest LNG pro- year from the first half of 2019.
ducer, has posted a second-quarter profit that However, in the second quarter of 2020 alone,
WHAT: topped analyst expectations at $197mn, up from the number of cargoes exported fell 25% y/y
Cheniere’s second- a net loss of $114mn in the second quarter of to 78 from 104 a year earlier. And the number
quarter earnings beat 2019. The result comes despite a spate of US LNG of cargoes threatens to be comparatively low
analyst expectations. cargo cancellations over the summer – indeed, again in the third quarter given the high num-
Cheniere attributed its increased profit in part ber of cancellations in July – though shipments
WHY: to higher margins stemming from the fees paid are anticipated to pick up again in August and
The company attributed by those of its customers that cancelled cargoes. September.
higher margins in part At the same time as Cheniere reported its A comparison with the first quarter also illus-
to collecting fees from second-quarter earnings, other signs of an trates how challenging the second quarter has
customers cancelling improvement in market conditions were emerg- been. First-quarter exports from Cheniere’s
cargoes. ing. US LNG exports are being forecast to rise terminals amounted to 128 cargoes, and the
in August, which would mark the first increase company reported net income of $375mn. On
WHAT NEXT: for the country in six months. And Cheniere is a sequential basis, Cheniere’s second-quarter
US LNG exports are being forging ahead with the further expansion of its profit marks a 47% decline.
forecast to rise in August LNG infrastructure as it continues to assert its Company revenues also fell on a sequential
for the first time in six dominance in the US and on the global market. basis in the second quarter, to $2.4bn, compared
months, resulting in more with $2.7bn in the first quarter, but rose 5% y/y
shipments for Cheniere. Making a profit from $2.3bn a year ago.
Cheniere has been exporting LNG since 2016, Cheniere’s CEO, Jack Fusco, described the
and steadily ramping up shipments of the second-quarter results as strong in the face of
super-chilled fuel as it has brought more liq- challenging market conditions and the contin-
uefaction trains online. Illustrating the contin- ued impact of the coronavirus (COVID-19)
ued rise in exports, even as cargo cancellations pandemic.
began to affect volumes earlier this year, is the The company did not disclose how many
fact that over the first six months of 2020, the contracted cargoes had been cancelled, but
company shipped 206 cargoes, up 8% year on a filing with the US Securities and Exchange

Week 31 07•August•2020 www. NEWSBASE .com P11