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REPORTING SEASON: Santos Limited (STO)

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Figure 1: Santos Limited 12 month chart

 

Santos Limited (STO) CEO steps down after a tough start to the year

– Energy firm Santos has reported its first half results showing a 15% slide in revenue and 82% fall in net profit to $37Million, despite a 13% rise in production throughout 1H15 to 28.3Million barrels of oil equivalent (Mmboe). The ~50% slide in the oil price year on year (Y/Y) has significantly impacted the company. STO’s realised oil price was US$60/ barrel in 1H15 compared with US$115/ barrel in 1H14 down 38% Y/Y.

– The company said it will undertake a thorough strategic review of its business in order to restore and maximise shareholder value. STO also announced that its current CEO David Knox will step down from his position, but will continue in the role until a successor is found.

– STO said it is considering a spin-off of its assets going forward. The company has cut is CAPEX by 55% and is looking to rework major contracts to ensure better pricing for supplies and secure future work that they hope will deliver $180Million in supply-chain savings over the next year.

– Santos said its QLD LNG project is on track to pump LNG by end of the 3Q15 and is on budget. STO have maintained FY15 production guidance of 57-64 Mmboe. Santos will pay a 1H15 dividend of $0.15 to shareholders on the 30th of September.

 

You can see all of CommSec’s reporting season analysis by clicking here.

Juliana Roadley, Market Analyst,