Lower LNG Prices Drag Cheniere’s Q2 Profit Down by 36%

Cheniere Energy (NYSE: LNG) booked a 36% decline in its second-quarter earnings compared to a year ago, due to lower margins for delivered LNG cargoes.

Cheniere Energy, the biggest U.S. LNG exporter, reported on Thursday a net income of $880 million for the second quarter, down from $1.37 billion for the same period of 2023.

Half-year net income slumped by 80% to $1.382 billion from $6.8 billion for the six months ended June 30, 2023.

The decreases in net income, as well as in consolidated adjusted EBITDA, or core earnings, were “primarily due to moderating international gas prices and the higher proportion of our LNG being sold under long-term contracts, resulting in lower total margins per MMBtu of LNG delivered compared to the prior period,” Cheniere Energy said in the earnings release.

Total revenues fell by 21% to $3.251 billion for the second quarter, while LNG revenues dropped to $3 billion from $3.9 billion for the same period of 2023.

Despite the lower income due to moderating natural gas and LNG prices, Cheniere Energy raised its full-year guidance for consolidated adjusted EBITDA and distributable free cash flow.

Full year 2024 consolidated adjusted EBITDA guidance was raised to a range of $5.7 billion to $6.1 billion, up from $5.5 billion-$6 billon. Cheniere also revised up its guidance for the full year 2024 distributable cash flow to the $3.1 billion - $3.5 billion range, up from $2.9 billion-$3.4 billion previously expected.

“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,” Cheniere’s president and CEO Jack Fusco said.

“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.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com

• War Enters New Phase as Ukraine Launches Offensive in Russian Territory
• CNOOC Adds Massive Gas Reserves in South China Sea Discovery
• After Campaigning on Free Natural Gas, Erdogan Hikes Prices by 38%