Santos reported its 2022 full-year results today, revealing a record free cash flow of US$3.6 billion and an underlying profit of US$2.5 billion.
In a statement, Santos said the results show much higher oil and LNG prices than in the previous period, owing to increased global energy demand and increased interest in PNG LNG following the Oil Search merger.
According to Santos, the previously disclosed impairment charges of US$224 million after tax, losses on commodities hedging, and one-time expenditures related to acquisitions and disposals are all included in the reported net profit after tax of US$2.1 billion.
In 2022, Santos paid US$1.1 billion in government royalties and excises, taxes associated with royalties, and income taxes, and invested US$385 million in the host towns to assist local companies and community activities.
Santos also invests in decarbonisation projects that align with its Climate Transition Action Plan. At the end of the year, the Moomba Carbon Capture and Storage project was 40% complete and on target for the first CO2 injection in 2024.
In accordance with the company’s capital management plan, Santos has announced a return to shareholders of US$1.5 billion for 2022. This includes US$755 million in unfranked dividends and the previously announced US$700 million on-market share buyback, of which US$384 million had been completed by the end of 2022.
Managing Director and CEO Kevin Gallagher stated that Santos achieved record production, free cash flow, and underlying earnings in 2022 due to strong customer demand for our goods, better commodity prices, and disciplined cost management.
“Today’s results demonstrate the strength of Santos, with strong diversified cashflows and capacity to provide sustainable shareholder returns, fund new developments and the transition to a lower carbon future,” Gallagher said.
According to Gallagher, strong free cash flows enable Santos to deliver stronger shareholder returns through an increase in the final dividend and an increase in the previously announced on-market buyback, in accordance with the company’s conservative capital management approach.
“Demand for our products has remained strong in both Australia and internationally, due to increased demand and shortages of supply from producing nations because of global underinvestment in new supply sources,” Gallagher added.
Gallagher stated that Santos’ critical fuels play an important part in Australia’s and Asia’s energy security and provide economical and reliable alternatives to higher polluting fuels.
“We are focused on backfill projects to sustain production of these critical fuels in our core assets,” Gallagher said.
