Woodside (ASX:WPL) share price hits 52-week high after tripling full year earnings

Woodside more than tripled its profits in FY 2021…

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Key points

  • Woodside shares have hit a 52-week high on Thursday
  • Investors have been buying the energy producer's shares after it delivered a very strong full year result
  • Woodside tripled its profits and dividend in FY 2021

The Woodside Petroleum Limited (ASX: WPL) share price is pushing higher on Thursday following the release of its full year results.

In early trade, the energy producer's shares were up as much as 4% to a 52-week high of $27.66.

Woodside share price hits 52-week high amid strong profit growth

  • Annual sales volume rose 4.5% to 111.6 MMboe
  • Realised price surged 86% to US$60.30 per boe
  • Operating revenue up 93% to US$6,962 million
  • Operating cash flow jumped 105% to US$3,792 million
  • Underlying net profit after tax jumped 262% to US$1,620 million
  • Fully franked final dividend increased 255% to 105 US cents

What happened in FY 2021?

FY 2021 was all about rising oil and gas prices. Thanks to an 86% increase in its realised price to US$60.30 per boe and a modest 4.5% lift in annual sales volume, Woodside almost doubled its operating revenue to US$6,962 million.

And with the company's unit production cost only rising 10% to US$5.30 per boe, Woodside's profits grew at an even quicker rate over the period. The company reported a 262% jump in underlying net profit after tax to US$1,620 million.

This, and its strong cash flow generation, allowed the Woodside Board to declare a US$1.05 per share fully franked final dividend. This was up 255% over the prior corresponding period and brought its full year dividend to US$1.35 per share.

Management commentary

Woodside's CEO, Meg O'Neill, was pleased with the year and is optimistic on the future. Particularly given the company's merger with the petroleum assets of BHP Group Ltd (ASX: BHP).

She said: "Woodside ended 2021 in a strong financial position. Our higher underlying full-year profit of $1,620 million and free cash flow of $851 million reflected our consistent operational performance, the improved price environment for our products and the proactive decisions made to manage our sales portfolio."

"Our agreement to merge with BHP's petroleum business is expected to create a global energy company which would have the cash generation and balance sheet strength to deliver shareholder returns through economic cycles, opportunities to realise ongoing synergies and greater capacity to participate in the energy transition."

Outlook

Management has provided guidance for FY 2022, which excludes the impacts of the impending BHP merger. It expects production in FY 2022 to increase 1% to 7.5% to between 92MMboe and 98MMboe.

As for its investments, Woodside's investment expenditure guidance is US$3,800 million to US$4,200 million. This excludes the benefit of Global Infrastructure Partners' additional contribution of approximately $822 million for Pluto Train 2 and excludes any impact from the proposed merger.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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