Santos FY19 Results (ASX: STO)
Rene Anthony
Santos (ASX: STO) has reported its full-year results for FY19. We take a look at the company's headline figures, key commentary and guidance outlook, plus review the share market's reaction across the trading day.
Headline result
Santos has achieved a 10% increase in product sales across FY19, with net profit after tax rising by 7%.In addition, the energy business has also reported a record level of EBITDAX, up 14% to US$2.46bn, and record free cash flow, up 13% to US$1.14bn.The company's full-year dividend for FY19 is 11 cents, including a final dividend of US$0.05, fully franked. The ex-dividend date will be 25th February, 2020, while the record date is set for the 26th February, 2020.There was little movement in Santos' shares at the open, however, by the end of the trading session, the company's shares were lower by 1.2% to $8.07.
Key commentary
At the heart of Santos' result has been record onshore drilling performance, and an emphasis on cost reductions and efficiencies, with the business reporting normalised product costs that were 8% lower at US$6.97/boe.Elsewhere, the company is progressing its "diversified portfolio of growth projects" and also completed the integration of its Quadrant acquisition. Meanwhile, ConocoPhillips assets are set to be integrated into the business in northern Australia and Timor-Leste, with the timeline currently set for completion around the end of Q1 2020.Growth is also being realised through the Cooper Basin project, where production was stronger and there was 183% reserves replacement. Guidance has recently been increased at GLNG, highlighting the strong performance there.A final investment decision will be made with regards to the Barossa project once processing agreement discussions have concluded, however, the company has mentioned that there has been "good progress towards FID".
Guidance outlook
Santos has maintained an unchanged guidance outlook for 2020. This includes: total production of 79-87 mmboe; sales volumes of 99-107 mmboe; base capex of ~US$950m; major growth capex of ~US$500m; and unit production costs for the base business of US$7-7.40/boe, excluding the acquisition of ConocoPhillips' assets.
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