Beach Energy Ltd.’s stock plunged with FY 18 result

Robust performance in FY 18: Beach Energy Ltd.’s (ASX: BPT) stock plunged 6.33% on August 20, 2018 after the release of FY18 result and the market speculation that the FY 19 capex guidance is higher than expected to deliver production similar to pro forma FY18. On the other hand, BPT has delivered strong FY 18 results with 92% rise in the sales revenue to $1.25 billion and 86% growth in the underlying net profit after tax of $302 million. However, the statutory net profit after tax fell 49% to $199 million on the corresponding period due to exploration asset impairment and non-recurring items such as acquisition and integration costs.

Moreover, for FY 18, Operating cash flow rose 108% to $663 million on the corresponding period and the total production rose 80% to 19.0 MMboe on the corresponding period. Additionally, BPT expects for FY 19, the production volume to be in the range of 26.0 – 28.0 MMboe. FY19 is expected to be the biggest ever investment year for BPT and will help the company to achieve target of increasing production to above 30 MMboe by FY21. The capital expenditure for FY 19 is expected to be within the range of $460 – 540 million. Approximately 80% of expected FY19 capital expenditure is discretionary in nature. In addition, the net gearing fell from less than 33% at the time of completion of the Lattice acquisition to 25.9% at 30 June 2018 due to H2 FY18 cash generation. By the end of FY 19, net gearing is projected to fall below 20%. Due to strong performance in FY 18, BPT stock has risen 6.27% in three months as on August 17, 2018 and is trading at a P/E of 9.40x.

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FY 18 Financial Performance (Source: Company Reports)

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