When Will They Learn -- LNG -- May 4, 2022

I don't even know what to say. Link here.

Houston-based Cheniere Energy Inc reported an unexpected Q1 loss, but bumped its full-year profit forecast by 17% in its earnings release Wednesday, on the back of soaring LNG demand and natural gas prices.

The largest LNG exporter in the United States, Cheniere reported earnings up to $8.7 billion before interest, taxes, depreciation and amortization. That represents a $1.2-billion increase over analyst estimates from Bloomberg.

Despite the stellar guidance, Cheniere’s reported a net loss of $865 million ($3.41 per share) for the quarter, compared with a profit of $393 million ($1.54 per share) in the same period a year ago.

Analysts had been expecting the reverse–earnings of $3.51/share.

According to Cheniere, the company lost significantly on commodity derivative instruments indexed to international LNG prices and LNG margins were not enough to offset the loss.

“While operationally we seek to eliminate commodity risk by utilising derivatives to mitigate price volatility for commodities procured or sold over a period of time, as a result of the significant appreciation in forward international LNG commodity curves during the quarter, we incurred approximately $3.1bn of non-cash unfavorable changes in fair value attributed to positions indexed to such prices,” Cheniere said.

You have to be pretty special to pull this off.