LA Private

Santos’ profit decline: Impetus for Woodside Energy’s merger pause?

Santos (ASX:STO) revealed a 42% slump in its underlying 2023 net profit to $US1.423 billion ($A2.2 billion) due to weaker gas prices and sales. While this was down from a 2022 figure boosted to $US2.46 billion by one-off items, the Adelaide-based group’s statutory result also fell heavily – down 33% to $US1.416 billion.

Instead of pulling back, Santos has rewarded shareholders with a 16 per cent increase in the final dividend to 17.5 US cents a share, up from 15.1 cents. CEO Kevin Gallagher stated in Wednesday’s report that the company had “delivered record cash returns as a result of its high-performance culture, disciplined low-cost operating model, and strong focus on safety.”

“Today’s results demonstrate the capability of Santos to generate strong cash flow, develop major projects, and deliver sustainable shareholder returns,” Mr. Gallagher said.

“Our critical fuels are a necessary component in the energy security of Australia and Asia, and will be required to provide affordable and reliable energy whilst the world transitions to lower-carbon alternatives,” Mr. Gallagher added.

Santos is expanding its LNG portfolio by delivering on Barossa with first gas expected in the third quarter next year and progressing Papua LNG towards a final investment decision. First oil from Pikka is expected in the first half of 2026. These projects will transform Santos and provide long-term value for shareholders.

Santos today also released its 2023 Sustainability and Climate Report, providing an update on the Company’s progress towards achieving our target of net-zero scope one and two emissions.

The company said guidance for 2024 remains unchanged at 84.90 million barrels of oil equivalent (mmboe) for production and 87-93 mmboe for sales.