Cheniere Energy Partners, L.P. (CQP)·Q2 2025 Earnings Summary

Executive Summary

• Q2 revenue of $2.455B and EPS of $0.91 per common unit; both were slightly below consensus, driven by planned maintenance that lowered recognized volumes and raised O&M expense, partially offset by higher margins per MMBtu . Consensus: revenue $2.513B*, EPS $0.96*.
• Adjusted EBITDA was $726M, down 13% YoY, reflecting maintenance and lower volumes; net income was $553M, down 3% YoY, but gross margins per MMBtu improved YoY .
• CQP reconfirmed full-year 2025 distribution guidance of $3.25–$3.35 per common unit and declared a Q2 cash distribution of $0.820 per unit (base $0.775 + variable $0.045) .
• Capital structure catalysts: issued $1.0B 5.550% Senior Notes due 2035 (proceeds used to redeem SPL 2026 notes); S&P upgraded CQP’s unsecured rating to BBB, supporting lower financing costs for SPL expansion .

What Went Well and What Went Wrong

What Went Well

• Reconfirmed FY25 distribution guidance ($3.25–$3.35) and maintained base distribution ($3.10), supporting income stability; Q2 distribution declared at $0.820 per unit .
• Improved gross margins per MMBtu YoY, which partially offset maintenance impacts: “The decreases were partially offset by higher gross margins per MMBtu of LNG delivered during the 2025 periods” .
• Strategic progress: updated SPL Expansion FERC application to a two-phased, three-train plan (~20 mtpa peak) and marked 3,000th cargo loaded in July, underscoring operational scale .

What Went Wrong

• Missed consensus on revenue and EPS: Revenue $2.455B vs $2.513B*; EPS $0.91 vs $0.96*, reflecting lower volumes and higher O&M due to planned maintenance .
• Adjusted EBITDA fell to $726M (-13% YoY) as maintenance increased O&M and reduced volumes recognized in income; cargoes and TBtu declined YoY (98 cargoes vs 103; 352 TBtu vs 373) .
• Net income decreased modestly YoY to $553M (-3%), despite higher per-unit margins, highlighting sensitivity to throughput during maintenance windows .

Financial Results

Quarterly Trend (oldest → newest)

Margins (S&P Global definitions; not company-reported)

Values marked with * retrieved from S&P Global.

Actual vs Consensus (Q2 2025)

Values marked with * retrieved from S&P Global.

KPIs

Guidance Changes

Notes:

• No revenue/EBITDA/OpEx guidance provided by CQP in the Q2 materials; CQP focuses on distribution guidance .

Earnings Call Themes & Trends

Management Commentary

• “The decreases…were primarily attributable to planned maintenance activities…resulting in higher operating expenses and lower volumes recognized in income…partially offset by higher gross margins per MMBtu of LNG delivered” .
• “We successfully completed our large scale maintenance turnaround on Trains three and four at Sabine Pass…one of the largest turnarounds ever executed in the LNG industry” .
• “We are tightening our full year 2025 guidance range…reconfirming our guidance range of $3.25 to $3.35 per common unit of distributions from CQP” .
• “In July, we repaid $1,000,000,000 of senior secured notes due 2026 at SBL with the net proceeds from the issuance of $1,000,000,000 of unsecured notes due 2035 at CQP…S&P upgraded CQP’s unsecured rating to BBB” .
• SPL Expansion: “FERC application…updated to reflect a two-phased project, inclusive of three liquefaction trains…maintaining…~20 mtpa” .

Q&A Highlights

• Commercial momentum: Management sees supportive backdrop for long-term SPAs (e.g., JERA), emphasizing reliability and flexible supply; focus remains on risk-adjusted returns, not just volume growth .
• Optimization drivers: Downstream optimization and third-party cargo sourcing offset margin declines; major maintenance completed; remaining spot exposure in 2025 is minimal .
• Permitting/FID cadence: Phase-first approach at Sabine/Corpus; aiming for permitting progress to enable potential FID late 2026/early 2027; brownfield trains prioritized for accretive returns .
• Capex & cost per ton: Brownfield trains expected to be on the lower end of industry cost curves; target 6–7x capex/EBITDA ratios for new phases .

Estimates Context

• Q2 2025: Revenue $2.455B vs consensus $2.513B* (miss); EPS $0.91 vs consensus $0.96* (miss). Number of estimates: 4 for both revenue and EPS*.
• Q1 2025 (context): Revenue $2.989B vs consensus $2.734B* (beat); EPS $1.08 vs consensus $1.12* (slight miss on company-reported per unit).
• Margin metrics (EBITDA/EBIT/Net income %) used in the margin table are S&P Global definitions and may differ from company non-GAAP measures (e.g., Adjusted EBITDA).

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Q2 was operationally affected by planned maintenance: lower volumes and higher O&M drove modest YoY declines in EBITDA/net income; higher per-unit margins partially offset headwinds .
• Income story intact: FY25 distribution guidance reaffirmed; Q2 distribution declared; balance sheet and ratings trajectory supportive of SPL expansion financing optionality .
• Near-term estimate resets: Expect minor downward adjustments to Q2 EPS/revenue assumptions given the miss; maintenance is completed, reducing risk for Q3/Q4 .
• Medium-term growth optionality: Updated SPL Expansion FERC application and demonstrated execution suggest phased brownfield growth potential with disciplined capex-to-EBITDA targets .
• Trading implications: Maintenance-driven softness appears transitory; catalysts include distribution stability, debt optimization and rating upgrade, and regulatory progress on expansion; watch incremental SPA announcements and macro EU/Asia demand signals from parent LNG .
• KPI watchlist: Cargoes and TBtu should normalize post-turnaround; monitor gross margin per MMBtu and O&M normalization in Q3 .
• Note on metrics: Use company-reported Adjusted EBITDA for comparability across periods; consensus EBITDA may reflect differing definitions relative to company non-GAAP .