Liquefied natural gas producer Cheniere Energy, Inc. (NYSE:LNG) released its second quarter 2022 earnings results on Thursday, August 4, 2022.
Liquefied natural gas production is a segment of the energy business that has received a lot of media attention lately, which is maybe not surprising given that it has occasionally been proposed as a potential remedy for the European energy crisis.
Even while we are now seeing an increase in the shipment of the compound to Europe, that may not work out as some had hoped, but the industry will still see growth.
This is also evident in Cheniere Energy’s results, which showed phenomenal year-over-year revenue and cash flow increases.
However, there was a lot to admire here as Cheniere Energy made significant progress in rebuilding its balance sheet and was able to improve its projection – even though it did ultimately fall short of analysts’ expectations.
Cheniere’s Second Quarter Highlights:
Cheniere Energy’s total revenue for the second quarter of 2022 was $8.007 billion. The company’s revenue for the same quarter last year was $3.017 billion, which is a significant growth of 165.40%.
The most recent quarter saw the corporation generate operating profits of $1.477 billion. This is a significant 911.64% rise over the $146 million that the company reported in the same quarter last year.
In consideration of Chevron’s payment of $765 million, Cheniere Energy and Chevron (NYSE:CVX) decided to end their Terminal Use Agreement early.
During the reporting period, the firm recorded a consolidated adjusted EBITDA of $2.529 billion. When compared to the $1.023 billion that the company recorded for the comparable quarter last year, this is a highly positive comparison.
In the second quarter of 2022, Cheniere Energy recorded a net income of $741 million. In comparison to the $329 million net loss the company experienced during the second quarter of 2021, this indicates a significant improvement.
Numbers Are Up
The most important thing that anyone looking over the previous highlights will undoubtedly note is that almost all financial performance metrics significantly improved over the corresponding quarter last year.
This is mostly caused by the significantly higher cost of liquefied natural gas than it was a year ago. While this was primarily responsible for the increased cash flow and revenues, it was not the only factor. Additionally, Cheniere Energy transported more liquefied natural gas than it did in the same quarter last year.
According to the corporation, it sold 564 trillion BTU overall in the most recent quarter compared to 499 trillion BTU in the same quarter last year. Why these actions would boost the business’s sales and cash flow ought to be quite clear.
After all, it had a larger selection of goods to sell and was paid significantly more for them. Naturally, the sharp rise in revenues meant that there was a lot more cash available to trickle down to the company’s cash flows.
Russia drastically restricting the flow of natural gas to Europe in reaction to the sanctions that have been imposed on it has been one of the most prominent issues in the news over the past few months. According to certain projections, Europe may not have enough gas supplies to get through the winter.
Therefore, it seems sensible that Europe would be one of the regions receiving some of this increased supply of liquefied natural gas. In actuality, liquefied natural gas imports into Europe increased by 51% from the previous year.
Future Looks Bright
Zacks Investment Research predicts that over the next three to five years, the company will increase its profits per share at a rate of 55.39%. At the current price, this results in the company having a price-to-earnings ratio of 0.15, which is an obvious indication that the stock seems to be cheap in comparison to the rise in earnings per share.
If you can tolerate the risk associated with the company’s debt, holding a position in the stock may be worthwhile when taking this into account along with the company’s increasing financial health and performance.
Featured Image: Megapixl @Timonschneider
