Santos reports record underlying earnings and higher shareholder returns
- Underlying profit US$2,461 million, up 160%
- Reported net profit after tax US$2,112 million, up 221%
- EBITDAX US$5,646 million, up 101%
- Free cash flow US$3,641 million, up 142%
- Balance sheet strengthened with gearing reduced to 18.9 per cent
- Annual merger integration synergies US$122 million
- US$1,455 million in announced shareholder returns for 2022, comprising:
- a 78% increase in the final dividend to US15.1 cents per share unfranked (US$500 million), bringing total dividends declared for the year to US22.7 cents per share (US$755 million)
- The previously announced increase in the on-market share buyback to US$700 million
Santos today announced its full-year results for 2022, reporting record free cash flow of US$3.6 billion and underlying profit of US$2.5 billion. The results reflect significantly higher oil and LNG prices compared to the corresponding period due to stronger global energy demand combined with a higher interest in PNG LNG following the Oil Search merger.
The reported net profit after tax of US$2.1 billion includes the previously announced impairment charges of US$224 million after tax, losses on commodity hedging and one-off costs associated with acquisitions and disposals.
Santos paid US$1.1 billion in government royalties and excise, royalty-related taxes and income taxes in 2022 and spent US$385 million in our host communities supporting local businesses and community initiatives.
Santos is also investing in decarbonisation projects consistent with our Climate Transition Action Plan. The Moomba Carbon Capture and Storage project was 40 per cent complete at the end of the year and on track for first injection of CO2 in 2024.
Santos has announced the return of US$1.5 billion to shareholders for 2022 under the company’s capital management framework, comprising US$755 million in unfranked dividends and the previously announced on-market share buyback of US$700 million, of which US$384 million had been completed by the end of 2022.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos delivered record production, free cash flow and underlying earnings in 2022 as the company benefited from strong customer demand for our products, higher commodity prices and disciplined cost management.
“Today’s results demonstrate the strength of Santos, with strong diversified cashflows and capacity to provide sustainable shareholder returns, fund new developments and the transition to a lower carbon future,” Mr Gallagher said.
“Strong free cash flows mean we are in a position to deliver higher shareholder returns through an increase in the final dividend and previously announced increase in the on-market buyback, consistent with our disciplined capital management framework.
“Demand for our products has remained strong in both Australia and internationally, due to increased demand and shortages of supply from producing nations because of global underinvestment in new supply sources.
“Our critical fuels not only play a key role in the energy security of Australia and Asia, but they also provide affordable and reliable alternatives to switch from higher emitting fuels.
“We are focused on backfill projects to sustain production of these critical fuels in our core assets.
A video presentation on the 2022 full-year results is available on Santos’ website. A live question and answer webcast for analysts and investors will be held today at 11:30 AEDT.
To access the live webcast, register on Santos’ website at www.santos.com.
 EBITDAX (earnings before interest, tax, depreciation, depletion, exploration, evaluation and impairment), underlying profit and free cash flow (operating cash flows less investing cash flows net of acquisitions and disposals and major growth capital expenditure, less lease liability payments) are non-IFRS measures that are presented to provide an understanding of the performance of Santos’ operations. Underlying profit excludes the impacts of costs associated with asset acquisitions, disposals and impairments, hedging as well as items that are subject to significant variability from one period to the next. The non-IFRS financial information is unaudited however the numbers have been extracted from the audited financial statements. A reconciliation between net profit after tax and underlying profit is provided in the Appendix of the 2022 full-year results presentation released to ASX on 22 February 2023.
 Oil and natural gas, being hydrocarbon fuels that supply around 80 per cent of the world’s primary energy supply. Hydrocarbon fuels are critical to meet current and forecast energy demand and to the manufacturing of everyday products.