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Cheniere 3Q20 results

Some comments about 3Q20 Cheniere conference call:
  • The results of 3Q20 have not been goods for Cheniere. A bad quarter (as expected) due to cargo cancellations during the summer months. The fee related to the cargo cancellations ($450MM was added to the results of the 2Q20. The reason is that the cancellations were made in the 2Q20)
  • Cheniere has just confirmed its 2020 guidance ($3.8-4.1 Bn EBITDA) in the conference call,
  • Train 3 in Corpus Christi terminal (4.9MTPA) will start as soon as 1Q21 (Previously exp 2Q21). Moreover, Sabine Pass train 6 is expected in 2H22. It is 71% completed now.
  • Cheniere has also released its 2021 guidance – $4.2-4.5 Bn EBITDA + $1.2-1.5 Bn FCF
  • The board has confirmed that they will do more buybacks in 2021 if the stock price is “as cheap as it is now”
  • Cheniere has just signed a new contract to deliver 25 cargos between 2020 and 2025
  • In general, numbers are not good and Cheniere has even missed the analyst estimations. However, the LNG market is showing huge signs of recovery. The number of cargos on October 6 November is at its normal rate
  • Following our analysis, the FCF will be around $10/share in 2022. At the current $50.10 per share, we are pretty comfortable with this company in the portfolio

MORAM opened its position in Cheniere in September-20. The investment idea is focused on the huge discount we see on it. Cheniere business model is very stable (fixed long term contracts for 20-25 years), it is in a sector which is growing (LNG) and the company is also taking advantage of this trend and expanding itself

LNG cargos exported from Sabine Pass every month
Cheniere Sabine Pass Cargos – MORAM
LNG cargos exported from Corpus Christi every month
Moram – Cheniere Corpus Christi Cargos
Cheniere 3Q20 results

If apart from this briefing about the 3Q20 Cheniere results, you want to know more about Cheniere, click here.


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