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Top U.S. LNG Exporter Boosts Dividend By 20%

Cheniere Energy, the largest U.S. exporter of liquefied natural gas, is hiking its dividend by around 20% this quarter and is upsizing its share buyback program as it expects increased core earnings thanks to high margins on LNG throughout this year.

In a corporate update this week, Cheniere announced its long-term capital allocation plan and raised its earnings guidance for 2022, as the LNG exporter continues to supply most of its cargoes to energy-starved Europe, which looks to U.S. LNG to replace part of the Russian pipeline gas it was receiving before Putin invaded Ukraine.   

Cheniere has decided to increase its annualized dividend by 20% to $1.58 per common share this quarter, up from the inaugural $1.32 per common share dividend that was initiated last year.

The LNG exporter also upsized its share repurchase program by $4 billion for an additional three-year authorization, with the potential to repurchase around 10% or more of Cheniere’s market capitalization with excess capital.

Cheniere is also raising full-year 2022 financial guidance by around $1.2 billion, expecting consolidated adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) in the range of $11.0 - $11.5 billion, up from up to $10.3 billion earlier expected. Distributable cash flow guidance was also raised to $8.1 - $8.6 billion for 2020, due primarily to accelerating several cargoes into 2022 which were previously forecast for 2023, as well as sustained higher margins on LNG throughout 2022, the company said.

“We expect to generate over $20 billion of available cash through 2026 and over $20 of Distributable Cash Flow per share on a run-rate basis,” said Zach Davis, Cheniere’s Executive Vice President and Chief Financial Officer.

Jack Fusco, Cheniere’s President and CEO, commented:

“Energy security has never been more critical, and we are confident in the significant long-term role of North American natural gas in the global energy supply mix.”

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Since the fourth quarter of 2021, Europe has been Cheniere’s primary LNG export destination, after overtaking Asia at the end of last year, the company’s presentation showed on Monday.   

By Tsvetana Paraskova for Oilprice.com

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