Woodside Energy shares (ASX:WDS) fell 2.79% today following the release of its H1 2025 results, as markets reacted negatively to a significant drop in underlying net profit, despite a surge in operating revenue. WDS has once again run into a wall when it comes to holding the A$27 level, and the latest set of numbers have seen bullish hopes for a break fade on the day.
Woodside reported an underlying net profit after tax (NPAT) of US$1.25 billion for the six months ended June 30, 2025, a 24% decrease compared to the US$1.63 billion reported in H1 2024. Reuters attributed the decline to lower prices and depreciation costs.
Operating revenue, however, presented a brighter picture, increasing by 10% year-on-year to US$6.60 billion. The Sangomar project in Senegal significantly contributed to revenue, adding nearly US$1 billion.
Free cash flow experienced a steep 63% year-on-year drop to US$272 million. The average realized price for oil and gas also slipped by 1% to US$61.80 per barrel of oil equivalent (boe).
Production volume saw an 11% year-on-year increase, reaching 548 thousand boe per day, totaling 99.2 million boe for the half-year. This increase failed to offset market concerns regarding profitability.
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A fully franked interim dividend of 53 US cents per share (cps) was declared, representing a 23.2% decrease from the previous year’s interim payout. Those seeking to capture this dividend must hold shares by market close on August 27, with the stock trading ex-dividend from August 28.
The company is making substantial progress on key projects, with Scarborough at 86% completion, Trion at 35%, and Beaumont New Ammonia nearing completion at 95%. Ongoing negotiations with the government continue regarding a 40-year extension for the North West Shelf project.
At the end of the period, Woodside reported cash and cash equivalents of US$4.88 billion.
The interim dividend represents an 80% payout ratio of underlying NPAT and an annualized yield of approximately 6.9%.
Despite the prevailing negative sentiment, it is crucial to consider the significant capital expenditure associated with bringing large-scale projects like Scarborough and Trion online. These are long-term investments designed to boost production and revenue in the coming years.
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