CQP
$42.61
Cheniere Energy Partners LP
($.14)
(.33%)
Earnings Details
3rd Quarter September 2019
Friday, November 1, 2019 8:00:00 AM
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Summary

Cheniere Energy Partners Reaffirms

Cheniere Energy Partners LP (CQP) reported 3rd Quarter September 2019 earnings of $0.19 per share on revenue of $1.5 billion. The consensus earnings estimate was $0.46 per share on revenue of $1.8 billion. Revenue fell 3.5% compared to the same quarter a year ago.

The company said it continues to expect 2019 distribution of $2.35 to $2.55 per unit and expects 2020 distribution of $2.55 to $2.65 per unit. The current consensus earnings estimate is $2.47 per share for the year ending December 31, 2019 and $2.55 per share for the year ending December 31, 2020.

Cheniere Energy Partners LP through its wholly-owned subsidiary owns and operates Sabine Pass LNG receiving terminal and Creole Trail Pipeline located in Louisiana.

Results
Reported Earnings
$0.19
Earnings Whisper
-
Consensus Estimate
$0.46
Reported Revenue
$1.48 Bil
Revenue Estimate
$1.79 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Cheniere Partners Reports Third Quarter 2019 Results, Reconfirms Full Year 2019 Distribution Guidance, and Provides 2020 Distribution Guidance

 

HOUSTON--(BUSINESS WIRE)--Cheniere Energy Partners, L.P. NYSE American: CQP):

Summary of Third Quarter 2019 Results (in millions, except LNG data)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

 

Revenues

$

1,476

 

 

$

1,529

 

 

$

4,930

 

$

4,529

 

Net income

$

110

 

 

$

307

 

 

$

727

 

$

923

 

Adjusted EBITDA1

$

543

 

 

$

604

 

 

$

1,741

 

$

1,825

 

LNG exported:

 

 

 

 

 

 

 

 

 

Number of cargoes

79

 

 

65

 

 

241

 

193

 

Volumes (TBtu)

280

 

 

228

 

 

856

 

691

 

LNG volumes loaded (TBtu)

277

 

 

228

 

 

855

 

691

 

 

Summary Distribution Guidance

 

2019 Full Year Distribution Guidance

 

 

 

 

2019

Distribution per Unit

$

2.35

-

$

 

2.55

 

 

2020 Full Year Distribution Guidance

 

 

2020

 

Distribution per Unit

$

2.55

-

$

 

2.65

 

Recent Highlights

Operational

  • As of October 25, 2019, approximately 800 cumulative LNG cargoes totaling approximately 55 million tonnes of LNG have been produced, loaded, and exported from the SPL Project (defined below).

Financial

  • In September 2019, we issued an aggregate principal amount of $1.5 billion of 4.50% Senior Notes due 2029, with proceeds of the offering being used to prepay the outstanding balance under the $750 million term loan under our credit facilities and for general corporate purposes, including funding future capital expenditures in connection with the construction of Train 6 at the SPL Project. After applying the proceeds of this offering, only a $750 million revolving credit facility, which is currently undrawn, remains as part of our credit facilities.
  • In September 2019, the date of first commercial delivery was reached under the 20-year LNG Sale and Purchase Agreements (“SPAs”) with Centrica plc and Total Gas & Power North America, Inc. relating to Train 5 of the SPL Project.

Liquefaction Project Update

 

SPL Project

Liquefaction Train

Train 6

Project Status

Under Construction

Project Completion Percentage(1)

38.1%(2)

Expected Substantial Completion

1H 2023

Note: Project update excludes Trains in operation

(1) Project completion percentage as of September 30, 2019

(2) Engineering 83.8% complete, procurement 54.1% complete, and construction 5.5% complete

Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE American: CQP) reported net income of $110 million and $727 million, respectively, for the three and nine months ended September 30, 2019, compared to net income of $307 million and $923 million for the comparable 2018 periods. The decreases in net income were primarily a result of increased total operating costs and expenses primarily as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project, lower margins per MMBtu of LNG recognized in income, and increased interest expense, partially offset by increased volumes of LNG recognized in income primarily as a result of additional Trains in operation.

Adjusted EBITDA1 was $543 million and $1.74 billion, respectively, for the three and nine months ended September 30, 2019, compared to $604 million and $1.83 billion for the comparable 2018 periods. The decreases in Adjusted EBITDA were primarily due to increased total operating costs and expenses as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project and decreased pricing of LNG recognized in income, partially offset by increased volumes of LNG recognized in income primarily as a result of additional Trains in operation.

Income from operations decreased $146 million during the three months ended September 30, 2019 as compared to the comparable 2018 period, primarily due to increased total operating costs and expenses as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project and decreased total margins2 on LNG recognized in income primarily as a result of increased net loss from changes in fair value of commodity derivatives and decreased pricing of LNG recognized in income, partially offset by increased volumes of LNG recognized in income primarily as a result of additional Trains in operation.

Income from operations decreased $91 million during the nine months ended September 30, 2019, primarily due to increased total operating costs and expenses as a result of additional Trains in operation and certain maintenance and related activities at the SPL Project, partially offset by increased total margins on LNG primarily as a result of increased volumes of LNG recognized in income and increased net gain from changes in fair value of commodity derivatives, partially offset by decreased pricing of LNG recognized in income.

During the three months ended September 30, 2019, 79 LNG cargoes were exported from the SPL Project, none of which were commissioning cargoes. During the nine months ended September 30, 2019, 241 LNG cargoes were exported from the SPL Project, three of which were commissioning cargoes.

SPL Project

We are operating and constructing a six Train liquefaction project at the Sabine Pass LNG terminal adjacent to the existing regasification facilities (the “SPL Project”). Trains 1 through 5 are operational and Train 6 is under construction. Each Train is expected to have a nominal production capacity, which is prior to adjusting for planned maintenance, production reliability, potential overdesign, and debottlenecking opportunities, of approximately 4.5 mtpa of LNG and a run rate adjusted nominal production capacity of approximately 4.8 to 4.9 mtpa of LNG.

Distributions to Unitholders

We will pay a cash distribution per common and subordinated unit of $0.62 to unitholders of record as of November 7, 2019 and the related general partner distribution on November 14, 2019.

Investor Conference Call and Webcast

Cheniere Energy, Inc. will host a conference call to discuss its financial and operating results for the third quarter on Friday, November 1, 2019, at 11 a.m. Eastern time / 10 a.m. Central time. A listen-only webcast of the call and an accompanying slide presentation may be accessed through our website at www.cheniere.com. Following the call, an archived recording will be made available on our website. The call and accompanying slide presentation may include financial and operating results or other information regarding Cheniere Partners.

1 Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for further details.

2 Total margins as used herein refers to total revenues less cost of sales and cost of sales—affiliate.

About Cheniere Partners

Cheniere Partners, through its subsidiary, Sabine Pass Liquefaction, LLC (“Sabine Pass Liquefaction”), is developing, constructing, and operating natural gas liquefaction facilities at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana, on the Sabine-Neches Waterway less than four miles from the Gulf Coast. Cheniere Partners, through Sabine Pass Liquefaction, is operating and constructing six Trains. Trains 1 through 5 are operational and Train 6 is under construction. Each Train is expected to have a nominal production capacity, which is prior to adjusting for planned maintenance, production reliability, potential overdesign, and debottlenecking opportunities, of approximately 4.5 mtpa of LNG and a run rate adjusted nominal production capacity of approximately 4.8 to 4.9 mtpa of LNG.

Through its wholly owned subsidiary, Sabine Pass LNG, L.P., Cheniere Partners owns and operates regasification facilities at the Sabine Pass LNG terminal, which includes pre-existing infrastructure of five LNG storage tanks with aggregate capacity of approximately 16.9 billion cubic feet equivalent, two marine berths that can each accommodate vessels with nominal capacity of up to 266,000 cubic meters and vaporizers with regasification capacity of approximately 4.0 Bcf/d. Cheniere Partners also owns a 94-mile pipeline that interconnects the Sabine Pass LNG terminal with a number of large interstate pipelines through its wholly owned subsidiary, Cheniere Creole Trail Pipeline, L.P.

For additional information, please refer to the Cheniere Partners website at www.cheniere.com and Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed with the Securities and Exchange Commission.

Forward-Looking Statements

This press release contains certain statements that may include “forward-looking statements.” All statements, other than statements of historical or present facts or conditions, included herein are “forward-looking statements.” Included among “forward-looking statements” are, among other things, (i) statements regarding Cheniere Partners’ financial and operational guidance, business strategy, plans and objectives, including the development, construction and operation of liquefaction facilities, (ii) statements regarding expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere Partners’ LNG terminal and liquefaction business, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements, and (vi) statements regarding future discussions and entry into contracts. Although Cheniere Partners believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere Partners’ actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere Partners’ periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere Partners does not assume a duty to update these forward-looking statements.

(Financial Tables Follow)

 

Cheniere Energy Partners, L.P.

Consolidated Statements of Income

(in millions, except per unit data)(1)

(unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2019

 

2018

 

2019

 

2018

Revenues

 

 

 

 

 

 

 

LNG revenues

$

1,140

 

 

$

1,249

 

 

$

3,678

 

 

$

3,419

 

LNG revenues—affiliate

257

 

 

205

 

 

1,017

 

 

886

 

Regasification revenues

66

 

 

66

 

 

199

 

 

196

 

Other revenues

13

 

 

9

 

 

36

 

 

28

 

Total revenues

1,476

 

 

1,529

 

 

4,930

 

 

4,529

 

 

 

 

 

 

 

 

 

Operating costs and expenses

 

 

 

 

 

 

 

Cost of sales (excluding depreciation and amortization expense shown separately below)

742

 

 

756

 

 

2,501

 

 

2,291

 

Cost of sales—affiliate

6

 

 

 

 

6

 

 

 

Operating and maintenance expense

172

 

 

113

 

 

472

 

 

306

 

Operating and maintenance expense—affiliate

34

 

 

31

 

 

100

 

 

87

 

Development expense

 

 

1

 

 

 

 

2

 

General and administrative expense

3

 

 

3

 

 

9

 

 

9

 

General and administrative expense—affiliate

34

 

 

18

 

 

82

 

 

53

 

Depreciation and amortization expense

138

 

 

107

 

 

390

 

 

318

 

Impairment expense and loss on disposal of assets

1

 

 

8

 

 

6

 

 

8

 

Total operating costs and expenses

1,130

 

 

1,037

 

 

3,566

 

 

3,074

 

 

 

 

 

 

 

 

 

Income from operations

346

 

 

492

 

 

1,364

 

 

1,455

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

Interest expense, net of capitalized interest

(231

)

 

(183

)

 

(648

)

 

(552

)

Loss on modification or extinguishment of debt

(13

)

 

(12

)

 

(13

)

 

(12

)

Derivative gain, net

 

 

2

 

 

 

 

13

 

Other income

8

 

 

8

 

 

24

 

 

19

 

Total other expense

(236

)

 

(185

)

 

(637

)

 

(532

)

 

 

 

 

 

 

 

 

Net income

$

110

 

 

$

307

 

 

$

727

 

 

$

923

 

 

 

 

 

 

 

 

 

Basic and diluted net income per common unit

$

0.19

 

 

$

0.60

 

 

$

1.38

 

 

$

1.82

 

 

 

 

 

 

 

 

 

Weighted average number of common units outstanding used for basic and diluted net income per common unit calculation

348.6

 

 

348.6

 

 

348.6

 

 

348.6

 

______________________

(1)

Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed with the Securities and Exchange Commission.

Cheniere Energy Partners, L.P.

Consolidated Balance Sheets

(in millions, except unit data) (1)

 

September 30,

 

December 31,

 

2019

 

2018

ASSETS

(unaudited)

 

 

Current assets

 

 

 

Cash and cash equivalents

$

1,707

 

 

$

 

Restricted cash

185

 

 

1,541

 

Accounts and other receivables

277

 

 

348

 

Accounts receivable—affiliate

67

 

 

114

 

Advances to affiliate

177

 

 

228

 

Inventory

103

 

 

99

 

Derivative assets

8

 

 

6

 

Other current assets

65

 

 

20

 

Total current assets

2,589

 

 

2,356

 

 

 

 

 

Property, plant and equipment, net

16,338

 

 

15,390

 

Operating lease assets, net

91

 

 

 

Debt issuance costs, net

17

 

 

13

 

Non-current derivative assets

29

 

 

31

 

Other non-current assets, net

157

 

 

184

 

Total assets

$

19,221

 

 

$

17,974

 

 

 

 

 

LIABILITIES AND PARTNERS’ EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

17

 

 

$

15

 

Accrued liabilities

657

 

 

821

 

Due to affiliates

40

 

 

49

 

Deferred revenue

169

 

 

116

 

Deferred revenue—affiliate

 

 

1

 

Current operating lease liabilities

6

 

 

 

Derivative liabilities

29

 

 

66

 

Total current liabilities

918

 

 

1,068

 

 

 

 

 

Long-term debt, net

17,571

 

 

16,066

 

Non-current operating lease liabilities

84

 

 

 

Non-current derivative liabilities

32

 

 

14

 

Other non-current liabilities

4

 

 

4

 

Other non-current liabilities—affiliate

20

 

 

22

 

 

 

 

 

Partners’ equity

 

 

 

Common unitholders’ interest (348.6 million units issued and outstanding at September 30, 2019 and December 31, 2018)

1,692

 

 

1,806

 

Subordinated unitholders’ interest (135.4 million units issued and outstanding at September 30, 2019 and December 31, 2018)

(1,035

)

 

(990

)

General partner’s interest (2% interest with 9.9 million units issued and outstanding at September 30, 2019 and December 31, 2018)

(65

)

 

(16

)

Total partners’ equity

592

 

 

800

 

Total liabilities and partners’ equity

$

19,221

 

 

$

17,974

 

______________________

(1)

Please refer to the Cheniere Energy Partners, L.P. Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, filed with the Securities and Exchange Commission.

Reconciliation of Non-GAAP Measures

Regulation G Reconciliation

In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying news release contains a non-GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure that is used to facilitate comparisons of operating performance across periods. This non-GAAP measure should be viewed as a supplement to and not a substitute for our U.S. GAAP measures of performance and the financial results calculated in accordance with U.S. GAAP, and the reconciliation from these results should be carefully evaluated.

Adjusted EBITDA is calculated by taking net income before interest expense, net of capitalized interest, changes in the fair value and settlement of our interest rate derivatives, taxes, depreciation and amortization, and adjusting for the effects of certain non-cash items, other non-operating income or expense items and other items not otherwise predictive or indicative of ongoing operating performance, including the effects of modification or extinguishment of debt and changes in the fair value of our commodity derivatives. Adjusted EBITDA is not intended to represent cash flows from operations or net income as defined by U.S. GAAP and is not necessarily comparable to similarly titled measures reported by other companies.

We believe Adjusted EBITDA provides relevant and useful information to management, investors and other users of our financial information in evaluating the effectiveness of our operating performance in a manner that is consistent with management’s evaluation of business performance. Management believes Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization which vary substantially from company to company depending on capital structure, the method by which assets were acquired and depreciation policies. Further, the exclusion of certain non-cash items, other non-operating income or expense items and other items not otherwise predictive or indicative of ongoing operating performance enables comparability to prior period performance and trend analysis.

Adjusted EBITDA

The following table reconciles our Adjusted EBITDA to U.S. GAAP results for the three and nine months ended September 30, 2019 and 2018 (in millions):

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2019

 

2018

 

2019

 

2018

Net income

$

110

 

 

$

307

 

 

$

727

 

 

$

923

 

Interest expense, net of capitalized interest

231

 

 

183

 

 

648

 

 

552

 

Loss on modification or extinguishment of debt

13

 

 

12

 

 

13

 

 

12

 

Derivative gain, net

 

 

(2

)

 

 

 

(13

)

Other income

(8

)

 

(8

)

 

(24

)

 

(19

)

Income from operations

$

346

 

 

$

492

 

 

$

1,364

 

 

$

1,455

 

Adjustments to reconcile income from operations to Adjusted EBITDA:

 

 

 

 

 

 

 

Depreciation and amortization expense

138

 

 

107

 

 

390

 

 

318

 

Loss (gain) from changes in fair value of commodity derivatives, net

58

 

 

(10

)

 

(19

)

 

37

 

Impairment expense and loss on disposal of assets

1

 

 

8

 

 

6

 

 

8

 

Legal settlement expense

 

 

7

 

 

 

 

7

 

Adjusted EBITDA

$

543

 

 

$

604

 

 

$

1,741

 

 

$

1,825

 

 

Cheniere Energy Partners, L.P.
Investors
Randy Bhatia, 713-375-5479
Megan Light, 713-375-5492
or
Media Relations
Eben Burnham-Snyder, 713-375-5764
Jenna Palfrey, 713-375-5491

Source: Cheniere Energy Partners, L.P.