shareholders have managed to sidestep the ramifications of their company's lackluster performance in the first half of June.
During the six months leading up to June 30, 2022, Australia's second-largest energy conglomerate witnessed a downturn of 32% in earnings, marking a significant shift from the previous year's growth.
Attributing the decline in net profit from $US1.17 billion in the prior year to $US790 million (equivalent to more than $A1.2 billion), Santos pointed to decreased production and lowered oil and LNG prices as the driving factors behind the setback.
In the first half, production plummeted by 13%, resulting in 45 million barrels of oil equivalent (MMboe), while revenue experienced a parallel decline of 21%, settling just above $US2.96 billion.
As anticipated by numerous analysts following the lackluster second quarter and the production-exploration report spanning six months, underlying earnings dipped by 37% to $US801 million.
In spite of the downward trend in earnings, Santos decided to elevate its interim dividend by 14%, amounting to 8.7 US cents per share, and upheld its full-year guidance.
Santos' CEO, Kevin Gallagher, expressed contentment with the company's resilient free cash flow and underlying earnings throughout the initial half of 2023, navigating a continually shifting macroeconomic landscape.
Gallagher stated, "Our primary focus remains fixed on executing our strategic plans, encompassing infrastructure reinforcement, decarbonization, and expansion of our Santos Energy Solutions division. Our ultimate aim is to strike a harmonious equilibrium between prudent and gradual investment in significant projects, shareholder returns, and channeling resources into innovative energy solutions to fulfill burgeoning customer demands."
He added, "The ongoing expansion of our Santos Energy Solutions arm is accompanied by sustained efforts to generate new revenue avenues through decarbonization endeavors. The Moomba carbon capture and storage initiative, anticipated to be one of the largest and most cost-effective worldwide, is progressing as scheduled for the initial injection of CO2 next year."
Gallagher highlighted, "Our indispensable role in ensuring energy security for Australia and Asia cannot be overstated. Gas plays a pivotal role in facilitating a cleaner energy trajectory, serving as a dependable supplement to renewable electricity and offering an economical, trustworthy alternative to more environmentally detrimental fuels."