Australia's Santos posts 16% drop in annual profit on lower prices, slashes dividend
Santos, an Australian oil and natural gas company, reported a lower-than expected annual profit and declared a smaller payout on Wednesday. The lower realized prices and decreasing production were to blame.
The oil and gas market remained volatile throughout the year. Supply chain disruptions caused by geopolitical concerns and a slowdown in demand from China, the United States' largest trading partner, hurt sales and production.
The average realized oil price for the year fell by 3%, to $84.76 a barrel. Prices for LNG also dropped 3%, to $12.31 a million British thermal units.
Santos also saw its annual production drop by 5%, due to a lower production of gas in Western Australia as well as a lower volume from the Bayu-Undan Project.
The company's profit underlying fell to $1.20bn for the year ending December 31, down from $1.42bn a year ago, falling short of Visible Alpha's consensus estimate of $1.32bn.
Santos has said that the first gas from its $4.3 billion Barossa Project is on schedule to be delivered in the third quarter this year. The project is 91% completed.
The company said that "strong progress" was being made at the Pikka Phase one project in Alaska. The project's first oil is expected to be produced in mid-2026. However, weather and logistics could affect the start-up date.
The Adelaide-based firm declared a final share dividend of 10.3c, lower than 17.5c announced a year ago.
(source: Reuters)
