Santos (ASX: STO) lifts FY22 final dividend by 78% as profit surges

February 22, 2023 04:02 PM AEDT | By Neha Simpy
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Highlights:

  • Santos Limited (ASX: STO) released its FY2022 results on 22 February 2023.
  • In FY2022, the company’s underlying profit was up 160% to US$2,461.
  • There was a 78% growth in the declared final unfranked dividend of 15.1 (US) cps.

Oil and gas provider Santos Limited (ASX: STO) released its FY2022 results ended 31 December last year on Wednesday, 22 February 2023. Santos declared 78% higher final dividend for FY22 as its profit more than doubled amid a global crunch in energy supply.

During FY2022, Santos’ revenue increased 65% to US$7,790 million from US$4,713 million in FY2021. Net profit for the period attributable to owners of Santos Limited jumped 221% to US$2,112 million, versus US$658 million in pcp. The growth is mainly because of better-realised pricing, which was partially offset by greater depreciation and depletion, amortisation, restoration expenditure and impairment costs.

While underlying profit in FY2022 was up 160% to US$2,461, the company’s basic earnings a share in FY2022 was 63 US cents rising from 30.8 US cents in pcp.

Santos’ revenue resulted mostly from the sale of gas and liquid hydrocarbons. In December 2021, the company concluded a merger with Oil Search Limited following the consent of Oil Search stakeholders and the National Court of Papua New Guinea.

As of 31 December, last year, Santos’ cash and cash equivalents were US$2,352 million, falling from US$ 2,976 million in pcp.

Santos’ asset performances

In Cooper Basin, production of 14 mmboe was noted in FY2022, decreasing from 15.3 mmboe in FY2021. GLNG in Queensland and New South Wales production in FY2022 was 14 mmboe as well but increased from 13.7 mmboe in pcp. At the same time, assets in Papua New Guinea produced 41.9 mmboe, much higher than the 14.2 mmboe noted in pcp.

Santos’ FY2022 dividend

Santos is returning a total amount of US$1,455 million to shareholders for FY22. This amount included a 78% growth in the final unfranked dividend to 15.1 (US) cps (US$500 million). Total dividends of Santos in 2022 come to 22.7 (US) cps (US$755 million). Also, this included an earlier announced on-market share buyback to US$700 million.

The dividend will be paid on 29 March this year, and STO shares will turn ex-dividend on 27 February as the record-date for the above dividend is 28 February this year.

Santos’ outlook

The company has begun this year on a confident note in implementing its strategic plan. It believes that its product demand will keep on growing this year and thereafter. Santos is well-placed to offer reliable, affordable, and sustainable energy, especially in Asian LNG markets, where gas demand is predicted to rise by nearly 70% by the year 2040.

Domestically, in Australia, the company is committed to providing gas in the local markets at reasonable prices along with the progress of the Narrabri gas project so that this can be accomplished.

Santos shares got a boost after the result announcement, and at 11:12 am AEDT, it was trading at AU$7.020, increasing 3.083%.

Company Name Market Price
(AU$)
Market Cap
(AU$)
Yearly Return
(%)
Dividend Yield
(%)
PE Ratio
(x)
YTD
(%)
52W High
(%)
52W Low
(%)
SANTOS FPO [STO] 7.035 23.326B -0.87 3.32 9.83 -4.62 8.86 6.75

*Data powered by Morningstar®. Data delayed 20 minutes unless otherwise indicated. Read More
as of 22/02/2023, 04:02:51 PM AEDT


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