Australia's Santos misses profit forecasts, gives no update on strategy review
By Echha Jain and Lewis Jackson
(Reuters) — Australian gas producer Santos reported a worse-than-feared 42% drop in annual profit on Wednesday on weaker gas prices and output and flagged it was working to boost its valuation after merger talks failed with bigger rival Woodside (OTC:WOPEY).
Santos, which only weeks ago stopped merger talks with Woodside Energy, reported an underlying profit of $1.42 billion for the year ended Dec. 31, down from $2.46 billion a year earlier.
The result missed an LSEG consensus estimate of $1.49 billion, and Santos shares fell as much as 2% in early trade.
The result comes as investors push the company to look for ways to revive an anemic share price that missed out on much of the 2022 boom in energy stocks. However the company shed little light on its strategy review.
On an investor call, CEO Kevin Gallagher did not rule out a proposal by hedge fund L1 Capital for Santos to spin off its lucrative liquefied natural gas (LNG) business, and said the company was continuing to work with advisers on ideas to improve the share price.
«As you saw with the Woodside discussions, we are more than willing and open to consider other opportunities if and when they become available,» he said.
Santos said work on the subsea infrastructure for its $4.3 billion Barossa gas project off northern Australia would start this quarter after it secured regulatory approval, one of the last regulatory hurdles for a project long-delayed by court battles.
First gas is expected in the third quarter of 2025.
Full-year results were weighed by weaker oil and LNG prices, which have fallen from the elevated levels seen in 2022 after the Russia-Ukraine war began. Earnings missed forecasts due to higher third-party purchase
Read more on investing.com
