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Summary

Santos today announced a higher first half underlying profit after tax and a significant increase in the interim dividend following the successful start-up of the PNG LNG project, which commenced production ahead of schedule in April.

Santos reports $258 million underlying first-half profit and 33% increase in interim dividend

Santos today announced a higher first half underlying profit after tax and a significant increase in the interim dividend following the successful start-up of the PNG LNG project, which commenced production ahead of schedule in April.

Santos Chairman, Ken Borda, said the start-up of PNG LNG and receipt of first cash from the project had enabled the company to substantially increase returns to shareholders through a 33% increase in the interim dividend to 20 cents per share fully franked.

The 2014 first half result reflects record sales revenue driven by higher crude oil and LNG sales volumes, and higher oil and gas prices, offset by the previously announced non-cash impairment of the company’s Indonesian coal-seam gas assets, and higher cost of sales, exploration expense and net finance costs.

Excluding net impairments and other one-off items, underlying net profit was up 3% to $258 million.

Managing Director and Chief Executive Officer, David Knox, said: “The first half of 2014 saw Santos achieve its highest oil production in six years, record sales revenue and strong operating cash flow.”

“We have set the foundation for a stronger second half.

“PNG LNG is producing at full capacity, and GLNG is more than 85% complete and on track to start-up next year, within budget.

“We remain focussed on growing shareholder returns as the company’s earnings and cash flows increase,” Mr Knox said.

All guidance for 2014 is maintained.

First half highlights

  • PNG LNG start-up ahead of schedule in April with the project producing at full capacity by late-July. Santos received its first cash from the project in July.
  • Peluang start-up ahead of schedule in March
  • GLNG more than 85% complete and on track for first LNG in 2015, within budget
  • Interim dividend up 33% to 20 cents per share fully franked
  • Sales revenue up 25% to $1.9 billion
  • EBITDAX up 13% to $950 million
  • Net profit after tax of $206 million includes previously advised $67 million after tax impairment
  • Underlying profit after tax up 3% to $258 million
  • Operating cash flow up 18% to $744 million