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REPORTING SEASON: Santos Limited (STO)

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Figure 1: Santos Limited 12 month chart

 

Santos’ result dragged down by impairments

 Santos (STO) has reported a full year net loss of $935 million, a decline of $1,451 compared to the net profit of $516 million in 2013. The result was mainly due to higher impairment losses of $1,563 million which were previously announced and reflected the decline in global oil prices over the period. The impairment charge is not expected to impact Santos’ investment grade credit rating or debt facilities.

 Revenue rose 12% to $4 billion helped by a ramp-up in production from the PNG LNG project, in addition to an increase in the Cooper Basin production. The average realised oil price for the year of US$103 per barrel was 11% lower than the prior year. At the same time, the average LNG selling price of A$859 per tonne was in line with the previous year. LNG sales revenue was up over 150% due the start-up of PNG LNG and the strong contribution made by Darwin LNG.

 There was no change to the 2015 production guidance with a target of 57-64 MMBOE being maintained. The capital expenditure guidance remained the same at approximately $2 billion.

 A fully franked final dividend of 15 cents per fully paid ordinary share will be paid on 25 March 2015 to shareholders who are registered at the close of business on 27 February 2015.

 

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Tom Piotrowski, Market Analyst,