Santos shares dip as full-year earnings recede
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More news: Santos shares were trading 1.6% lower at $7.28 by 2:00pm AEDT, after the market responded to a 42% drop in underlying net profit compared to the prior corresponding period.
Despite lower earnings, compounded by a reduction in production and sales volumes, Santos declared an interim dividend 16% higher than a year ago.
What they said: UBS analysts said Santos' total 2023 capital return was in line with its estimates, and "should see the stock trade favourably".
"Despite the slight miss to NPAT arising from higher upstream production costs, we believe investors will take confidence in Santos paying out 40% of free cash flow for the year via a strong final dividend," they said.
Santos earnings hit by weak oil and gas prices
The news: Santos earnings were hit by weaker prices and sales for the year to December 2023, as underlying net profit sunk 42% year on year.
The numbers: The energy group posts underlying net profit of USD1.42 billion ($2.2 billion) for the year, down from USD2.46 billion in 2022. Production and sales volumes reduced 11% and 14% respectively, with EBIT 36% lower at USD2.05 billion.
Despite the year-on-year decline, however, Santos declared a final dividend of 17.5 cents per share, up 16% compared to the prior corresponding period.
The context: Santos said the results reflected lower oil and LNG prices during the period, as well as lower production levels compared to the prior year.
Santos' results followed news earlier in this month that discussions with energy rival Woodside around a potential $80 billion merger had ended. While Woodside shares climbed on the news, Santos share prices sank more than 8%.
The source: ASX announcement
