Santos (STO) H1 2024 earnings summary

Executive summary

• Delivered strong half-year results with US$2.7 billion in sales revenue, US$1.1 billion free cash flow from operations, US$1.8 billion EBITDAX, and US$654 million underlying profit for H1 2024, with a record interim dividend of US$422 million (US13 cents per share, unfranked), up 49% year-over-year.

• Major projects progressing: Moomba CCS in advanced/final commissioning with first injection expected Q3 2024, Barossa 80% complete with first gas expected Q3 2025, and Pikka Phase 1 nearly 60% complete with first oil expected H1 2026.

• Maintained disciplined capital management, returning at least 40% of free cash flow to shareholders and prioritizing shareholder returns, major project investment, and energy transition funding.

• Improved safety performance with zero lost time injuries and moderate harm injuries for employees and contractors in H1 2024, and strong operational reliability, especially in PNG and Queensland.

Financial highlights

• Production of 44 million barrels of oil equivalent in H1 2024, down 2% year-over-year.

• EBITDAX totaled US$1.85 billion, with free cash flow from operations at US$1.1 billion, down 5% year-over-year.

• Underlying profit was US$654 million, down 18% year-over-year; net profit attributable to equity holders was US$636 million, down 19%.

• Interim dividend of US$422 million (US13.0 cents per share, unfranked), up 49% year-over-year.

• Gearing at 19.9% (23.5% including leases), with liquidity of US$4.0 billion and net debt of US$4.8 billion.

Outlook and guidance

• 2024 production guidance remains at 84–90 mmboe, with sales volumes of 87–93 mmboe.

• Sustaining capital expenditure guidance is ~US$1.25 billion, major project capex ~US$1.6 billion, and unit production costs expected at US$7.45–7.95/boe.

• Free cash flow outlook could reach US$4–5 billion per annum as Barossa and Pikka come online.

• Papua LNG FID now targeted for end of 2025, with project optimizations ongoing.

• Guidance for 2024 remains unchanged.