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