Engie Profit Edges Down 0.9% After Utility Shuts Nuclear Plant
The results reflect the permanent shutdown of a reactor in Belgium — where two more units are due to close by year's end — as well as weaker hydro output in France and Portugal. Receding power prices also weighed on earnings even as the utility benefited from higher natural gas demand in France.
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34 minutes ago
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Cheniere Energy: Key player for US Energy Dominance
Headquartered in Houston, Texas, and founded in 1996, Cheniere Energy Inc (NYSE:LNG) is the largest LNG producer in the U.S. and second largest globally. It operates two major liquefaction-export complexes (Sabine Pass LNG Terminal, Louisiana, and Corpus Christi LNG Terminal, Texas). Together, these two complexes give Cheniere an operational LNG capacity of 45 MTPA. There is an additional 10 million tonnes per annum, MTPA, capacity under construction. Warning! GuruFocus has detected 6 Warning Sign with LNG. The company has evolved significantly in the last fifteen years: Before 2010, Cheniere focused on importing LNG imports using regassification assets (before the advent of shale-derived energy). However, it soon pivoted towards liquefaction and export of gas, with the first export from Sabine Pass in 2016. Since 2020, Cheniere has been a major long-term supplier of LNG to Europe and Asia, becoming an increasingly important component of international energy security, particularly in the context of broader geopolitical turmoil. In 2023, the Corpus Christi complex began construction, and around 77% of this was completed by the end of 2024. Bechtel is the company's most critical construction partner, having played a contracted role in the building of both Sabine Pass and Corpus Christi complexes. Cheniere's principal revenue stream is derived from long-term infrastructure contracts, although a small proportion is based on spot market merchant marketing of LNG commodities. The liquefaction services find customers in utilities companies, traders, and sovereign buyers, which reserve export capacity through sales and purchase agreements, SPAs. The fixed liquefaction fee (c. $2.84/ million British thermal units, MMBtu) is paid irrespective of LNG delivery, with the variable fee (cited as 115% of Henry Hub reference price) covers fuel and shipping costs. Cheniere acquires gas from upstream suppliers such as Tourmaline, before liquefying and selling it under long-term SPAs or on the spot market. This spot market revenue generation causes full exposure to price spreads between U.S. and international gas markets but can create upside through arbitrage. Finally, Cheniere has begun to charter LNG vessels to ensure interoperability and insurance across the LNG industry. It subleases these to create revenue (c. $322 million in 2024). The company has a different ownership structure and organisation compared to many other companies. Cheniere Energy Inc. owns all underlying LNG assets through wholly owned subsidiaries, whilst Cheniere Energy Partners, which Cheniere Energy Inc. owns at a Master Limited (100% general partner interest, 48.6% limited partner interest, and 100% of the distribution rights). The other LP percentage points are owned by investment companies such as Blackstone, but these do not withdraw operational and accounting control from Cheniere. Beyond the Sabine Pass and Corpus Christi LNG complexes, Cheniere owns other assets, namely Cheniere Marketing (the spot market subsidiary of Cheniere, trading and managing cargoes for the spot market), the Cheniere Creole Trail Pipeline (94 miles of feed gas pipeline to Sabine Pass), and Cheniere Corpus Christi Pipeline (21 miles of feed gas pipeline to Corpus Christi). Source: 25Q1 10-Q Source: 25Q1 Investor Presentation The core business of Cheniere Energy is through LNG liquefaction. This is done through long-term SPAs (sales and purchase agreements), and account for around 90% of the company's revenue. By long-term Cheniere runs 10-20 year contracts that will be paid whether the cargo is lifted or not. The fee is structured with a fixed liquefaction aspect (typically between $2.00 - $3.50/MMBtu), and a variable fee which is set at 115% of Henry Hub (the gas nucleus for east America and a reference price used for spot pricing). This fee covers fuel and shipping costs. The high contracted volume means a steady, predictable revenue and limits the company to volatile spot prices. Moreover, it can assist with project finance acquisition, reduces earnings risk. The company has increased its average price per MMBtu over time, and this increases revenue and EBITDA per unit, thus improving Cheniere's profitability through time. Cheniere's buyers are large international utilities companies, oil majors, and national energy companies (e.g. Shell, Equinor), and these are required to produce letters of credit to assist with forensic credit assessments to ensure low default risk, improving the reliability of the counterparties. Importantly, there is low risk for revenue disruption since take-or-pay contracts obligate customers to pay the fixed fee regardless of LNG collection. Since the Henry Hub price has no effect on Cheniere's EBITDA (used solely for feed gas, fuel, and shipping), volatility of this commodity does not impact EBITDA for long-term contracted volumes (though spot market revenue - 10% of total - is still exposed to this). In the context of spot and short-term sales via Cheniere Marketing, up to 10% of revenue can be generated this way, though this is highly variable and cyclical. Essentially, the company sells off uncontracted LNG cargoes, generated through excess production, flexible volumes, and commissioning volumes. Such revenue comprises the LNG sale price minus the Henry Hub price, shipping costs, and liquefaction cost. Therefore, revenue here is sensitive to global LNG spreads, freight rates, and cargo destination arbitrage, thus causing high EBITDA variability and sensitivity to global spread markets. Finally, the company generates a small proportion of revenue (2% to 4%) through LNG vessel sublease revenue. Here, Cheniere charters specific ships and subleases these to third parties for a profit. The drivers of such revenue include spot and contract LNG shipping rates, the management capabilities of the fleet, and the requirement of flexible destinations and timings. Although not a contributor to core earnings, this revenue can be more substantial during periods of tight global vessel availability. The global LNG trade landscape has been increasingly shaped by policy-driven volatility, including climate regulation, export permit regimes, and in the US, broadly different presidential views towards the energy transition. As a result, Cheniere has had to insulate itself from external fluctuations in the global economic and political environment. Cheniere supports an LNG demand that is spread over more than 40 countries, including major markets in Asia and Europe, thus making the company more resilient to national policy shifts. A large part of this insulatory effect (one I believe will become even more important in the coming years and months) is the free on board contract structure. Cheniere delivers LNG to a terminal, but takes no responsibility for shipping, customs, and risks associated with the destination geography; the company is significantly distanced from sanctions, freight cost volatility, and trade barriers. The company has received record high LNG imports to Europe: Source: 25Q1 Investor Presentation Accompanying this is a geographical representation of Cheniere's global export proportions: Source: 25Q1 Investor Presentation In the first quarter of 2025, revenue came in at $5,444 million, compared to a Q1 of 2024, which was $4,253 million. Similarly, there was an increase in the consolidated adjusted EBITDA from $1,773 million to $1,872 million. This increase reflects the increased export of LNG from 602 TBtu to 609 TBtu from Q124 to Q125. The company has repurchased 1.6 million shares for around $350 million. Cheniere has also funded $325 million of complex Corpus Christi complex Stage 3 growth. The company, which is in significant debt (around $22.8 billion), repaid $300 million. Many of these actions fell under the company's 20/20 Vision' Capital Allocation plan: ? $4.9 billion debt reduction ? $4.5 billion shares repurchased ? $4.820/shares declared ? $4.4 billion total growth Capex funded These targets are ambitious, though progress is being made towards all of them, suggesting they may be achievable. Debt is spread across Cheniere Energy, Cheniere Energy Partners, and Cheniere Corpus Christi Holdings. The company also holds around $2.9 billion in cash, of which roughly $0.4 billion is restricted. This leaves a net debt position of approximately $19.9 billion. At the Cheniere Energy level, the company carries senior unsecured notes maturing in 2028 and 2034, carrying interest rates of 4.625% and 5.65%, respectively. It also maintains a revolving credit facility maturing in 2026. At the Cheniere Energy Partners level, which governs Sabine Pass, Cheniere has long-dated unsecured notes maturing in 2029 and 2031 and a separate revolver maturing in 2028. Meanwhile, at CCH, which funds and operates the Corpus Christi complex, the company has structured debt including 2039 notes, a $3.3 billion term loan linked to the completion of Stage 3, and a $1.5 billion working capital facility due in 2027. Based on the 10-Q for 2025 Q1, Cheniere can deliver around 2,464 TBtu/year (616 x 4). With an annualised EBITDA of $5.2 billion, the margin per MMBtu will be $2.11 ($5,200,000,000/2,464,000,000 MMBtu). This represents only a high-level estimation of Cheniere's operating profitability per exported unit of LNG. Most importantly, I believe, is the recent upgrade by Fitch Ratings of Cheniere from BBB to BBB- which will have positive implications for the company, unlocking lower costs of borrowing, as well as increasing its access to potential debt investors. Under the current configuration of six trains at Sabine Pass and the first three at Corpus Christi, Cheniere expects to generate between $5.3 and $5.7 billion in adjusted EBITDA on an annualised basis. Starting with risks: the assets and infrastructure which Cheniere owns are concentrated in the U.S. Gulf. This means the company is highly susceptible to regional weather events and infrastructure bottlenecks/damages. As climate change increases the frequency and intensity of extreme weather events (particularly hurricanes), Cheniere may face a greater likelihood of infrastructure damage as a result of its Gulf Coast base of operations. Similarly, regional pipeline or gas infrastructure congestion can have a simultaneous negative impact on both the Sabine Pass and Corpus Christi. This lack of geographical diversification creates a substantial risk for the company. A further risk which Cheniere faces is the reliance on US-based natural gas (i.e. Henry Hub), thus exposing the company to dislocation between these prices and global LNG benchmarks. Cheniere's sales and purchase agreements are primarily linked to 115% of Henry Hub, such that disproportionate spikes can decrease the economic feasibility of spot market deals. Other companies use indexed trading prices, making them less vulnerable to US-specific gas markets. The aging of regassification assets which still generate revenue may be another risk, since it is functionally redundant and has low utility. The unclear plans for its future may hinder Cheniere's adaptability to new scenarios. This is amplified by its lack of synergy with LNG exports - the core business model of the company. Maintaining a rapidly depreciating asset, and increasingly high potential for early termination due to low utilisation could be a significant hit for Cheniere. Interestingly, however, its low importance relative to the core model may minimise this risk, though it is recommended that this is taken into consideration, since other LNG producers don't typically carry this type of legacy regas asset on the balance sheet. Connected to this may be the age of integral assets to the company. Sabine Pass began exports in 2016, and is thus entering the middle of its useful lifetime. Expansion or updates to this site offer risks in terms of ease of integration, as well as potential complications with FERC re-approval for such actions. Other companies (for example NextDecade and QatarEnergy's expansion plans) are constructing infrastructure on greenfield sites, typically less susceptible to such risks. This could lead to eventual loss of market leadership to more dynamic companies (a pattern that has been seen across industries). Another risk arises from potential misalignment of interest between Cheniere Energy Partners (NYSE:CQP) and Cheniere Energy (NYSE:LNG) in the decisions made regarding Sabine Pass. CQP is a publicly traded master limited partnership, and this form of ownership structure is unlike most other international LNG players, which own their assets directly or through 100%-owned subsidiaries. For Cheniere, this can complicate cash flows but more importantly, this could affect the expansion or dividend policy, something potentially compounded by the aging, brownfield nature of the Sabine Pass site. A final risk comes from further LNG infrastructure in the Americas, such as Shell's LNG Canada in British Columbia serving Asia, and St. Lawrence River LNG projects in Quebec serving Europe. That's in addition to Argentina LNG, a joint venture between YPF and Eni. Now to opportunities: a first opportunity is the novel agreement between Cheniere and JERA, an energy major of Japan. This is a first of its kind agreement, since Cheniere has previously been absent from Japan's energy market. JERA plans to contract around 1 MTPA across the Sabine Pass and Corpus Christi complex from around 2030 under a 20-year agreement. This will expand Cheniere's access into the Asia-Pacific markets, where there is growing demand for LNG, whilst also boosting the company's revenue resilience through the large SPA. A second opportunity for Cheniere is the recent final investment decision for two more trains at the Corpus Christi complexes. It is predicted that these will expand the capacity of the site by a further 5 MTPA and raise the forecasted platform capacity to 60-63 MTPA by mid to late 2030s. This is through both direct and indirect support, since 20% of the increased capacity is stated to arise from debottlenecking effects, whilst 3 MTPA will come from the trains themselves. These trains will generate incremental EBITDA through contribution to long-term fixed fee revenue. The project supports a structured use of $25 billion of capital through 2030, which will cover the expansion alongside debt repayment, dividends, and share purchases. Personally, I believe this suggests discipline from management since repayment is balanced against the expansion itself. A risk with this expansion, however, is the capital risk and timeline slippage that occurs with a necessarily large investment such as this. The company forecasts EBITDA of $6.7 to $7.3 billion and distributable cash flow of $3.9 to $4.3 billion annually. A third opportunity of growing revenue for Cheniere will likely come from a new 15-year gas supply deal with Canadian Natural Resources (CNQ) for 0.85 MTPA. This agreement has a direct correlation to favourable Henry Hub - JKM spreads. The agreement essentially has secured gas supply from a creditworthy source outside of the US, diversifying from typical energy sources (HH). This will increase supply optionality, improving insurance effects particularly in a world with an unstable U.S. economy. This also will broaden the LNG marketing aspect of the company's revenue stream by tying volumes to JKM prices, potentially facilitating price leverage, important where JKM often outpaces HH. The respected hedge funds D.E. Shaw & Co and Two Sigma Investments are owners of Cheniere Energy, as per the most recent 13F filings. Famed value investor Dimensional Fund Advisors is also a shareholder, owning just under 1% of the Cheniere Energy. Venture Global (VG) is Cheniere Energy's closest peer in that it is also a US LNG exporter owning liquefaction facilities. Cheniere Energy trades on a trailing P/E of 17, while Venture Global trades on a trailing P/E of 33. VG's higher P/E is likely due to its aggressive growth plans at its Plaquemines project with commercial operation date of Phase I expected to be 2026 and commercial operation date of Phase II in 2027. In terms of next 12 months EV/EBITDA, according to LSEG estimates, Cheniere Energy and Venture Global trade on similar multiples of just under 11x. As a point of reference, other large cap stocks in the Oil and Gas Storage and Transportation sector, such as Williams (WMB), ONEOK (OKE), and Kinder Morgan (KMI) trade in a 10-12x range for next 12 months EV/EBITDA, according to LSEG estimates, though these three companies are more exposed pipeline services. It is worth noting however, that Venture Global has various customer arbitrations are ongoing with initial rulings anticipated in the second half of this year. There is the potential that Venture Global could pay significant damages if found in breach of contract. In my opinion, given Cheniere Energy's longer track record and I believe greater inherent stability and lower risk, it should trade at a slight EV/EBITDA premium to Venture Global. With the LNG demand pull from the rest of the world, there's no reason Cheniere could not trade at the 12x multiple that Williams enjoys. NextDecade Corp (NEXT) is another pure play US LNG exporter, however it is still in the construction stage, so doesn't have any revenue or earnings to compare. As of 30 June 2025, Cheniere Energy is the seventh largest energy company by float adjusted market capitalization in the MSCI USA index, a rules driven index many institutional investors use as a benchmark. Cheniere Energy is ahead of S&P 500 constituents Marathan Petroleum (MPC), Oneok (OKE), and Phillips 66 (PSX) in the MSCI USA. However, for an unknown reason, the S&P 500 index committee has still not included Cheniere in the most famous index, which is widely tracked by exchange traded funds. Perhaps, once Hess Corp (HES) gets delisted if it does get acquired by Chevron (CVX), then the S&P committee will replace Hess with Cheniere, which will create a lot of buying in Cheniere Energy's stock. Although Cheniere Energy is a little exposed to the spreads between natural gas prices in the United States and Europe and Asia, its robust long term contracts and solid history of good operating performance mean that the company is a very robust energy infrastructure play in the era of America's energy dominance. Export growth will lead to revenue growth and earnings growth. With the demise of the Russian natural gas giant Gazprom's supply contracts to Europe, Cheniere Energy is stepping in to help fill to that massive void and become a world class supplier to global energy markets. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
39 minutes ago
- Yahoo
£34.9m Liverpool Transfer Target Rejects Everton
Malick Fofana Transfer Update: Belgian Star Rejects Everton Amid Champions League Ambitions Malick Fofana, one of Belgium's brightest young attacking prospects, appears to be setting his sights far higher than a move to Goodison Park. The 20-year-old had an excellent season for Lyon in Ligue 1, registering 11 goals and five assists, and that form has naturally attracted attention across Europe. While Premier League clubs have been circling, the former KAA Gent academy talent seems in no rush to make a decision based on who knocks first. Everton were the first to act decisively, with reports from Fabrizio Romano confirming the Toffees are 'in advanced talks' with Lyon, offering a package worth around €36 million including bonuses. Lyon, however, are holding out for a guaranteed €40 million. But according to respected Belgian journalist Sacha Tavolieri, 'Malick Fofana has other plans than joining Everton Football Club. As told yesterday, the Belgian Red Devil knows some teams playing Champions League that are waiting to make room in the squad are interested in him.' Champions League Clubs Hold the Key Fofana's ambitions are clear: he wants a club playing at the highest level of European football. Despite Everton's determination and financial push, it's a sporting project Fofana is prioritising. Liverpool had reportedly opened talks with the player's representatives earlier this month, as reported by Le'Equipe. The Reds are known to be in the market for attacking reinforcements this summer, following the sale of Luis Diaz to Bayern Munich for £65.5 million. The interest in Fofana appears to be genuine, even if not yet advanced. Other suitors reportedly include Bayern themselves and clubs from Italy and Spain, all watching the situation develop as they balance their current squads and financial restrictions. Not Just About Money Fofana has also turned down Nottingham Forest, signalling that his next destination must match his trajectory and aspirations. His intent is not merely a move to the Premier League but a step towards elite competition. While Lyon are open to selling, they won't accept anything below their valuation. It's a deal that will require the right mix of finances, sporting prestige and vision. Liverpool's Interest Still Active Liverpool's scouting network has been diligent this summer, with Arne Slot aiming to build on last season's title-winning success. Fofana fits the age profile and stylistic mould Liverpool have often pursued in recent windows. His acceleration, directness and sharp end product would certainly add depth to Slot's frontline. However, patience will be crucial. Clubs in the Champions League are still adjusting their squads, and the real movement could come once a domino falls. If Liverpool decide to accelerate their interest, they may still be able to position themselves favourably. But as it stands, no agreement is imminent. Our View – Anfield Index Analysis Fofana's stance is actually reassuring. This is a player who knows what he wants. Turning down Premier League clubs like Everton and Forest because they don't offer Champions League football suggests he's focused on legacy, not just wages. With Luis Diaz now officially a Bayern Munich player, there's a clear need to fill that void. Fofana, with his ability to operate on either flank, sharp movement and age profile, fits what Arne Slot might be looking for. But given Slot's reputation for tactical cohesion and discipline, it will be interesting to see if Liverpool push for a player who is still relatively raw at 20, even if the ceiling is sky high. Slot's Premier League title win in his debut campaign gives him both credit in the bank and a foundation to attract top talent. If Fofana truly wants to play Champions League football and develop under a progressive manager, Liverpool ticks every box. However, it's worth remembering that the tragic loss of Diogo Jota this summer has created both an emotional and tactical gap. The club may prioritise someone with a bit more experience to step into that role immediately. Fofana feels like a longer-term project, albeit one with immense potential. If Liverpool are in the race, it won't be to simply make up numbers. Keep an eye on this one.
Yahoo
39 minutes ago
- Yahoo
Why Yield-Focused Investors Favor Chevron (CVX) in the Dogs of the Dow Portfolio
Chevron Corporation (NYSE:CVX) is included among the 11 Dogs of the Dow Dividend Stocks to Buy Now. An aerial view of an oil rig at sea, the sun glinting off its structure. It is currently facing some company-specific challenges, including a complicated merger and operations in politically unstable regions. However, these issues are unlikely to affect its long-term prospects. Income-focused investors can generally feel confident investing in Chevron. Chevron Corporation (NYSE:CVX)'s integrated business model, covering everything from exploration and production to refining and chemicals, offers operational flexibility and acts as a natural hedge against fluctuations in energy prices, enhancing its resilience through market cycles. Unlike many competitors who chase volume growth, Chevron takes a disciplined approach, investing only in its highest-return projects, avoiding overexpansion during booms, and making strategic, value-adding acquisitions. This strategy, along with a strong balance sheet, establishes Chevron Corporation (NYSE:CVX) as a leading operator with the financial strength to endure downturns and seize growth opportunities. The company has been growing its dividends for 38 consecutive years and currently offers a quarterly dividend of $1.71 per share. As of July 26, the stock has a dividend yield of 4.42%. While we acknowledge the potential of CVX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None. Melden Sie sich an, um Ihr Portfolio aufzurufen.
