Santos share price marches higher on surging dividend payout

Among the 2022 highlights, Santos successfully implemented its merger with Oil Search.

| More on:
A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Santos share price is in the green
  • The ASX 200 oil stock posted a record full-year revenue of US$7.8 billion
  • The final dividend increased by 78% from the prior year

The Santos Ltd (ASX: STO) share price is marching higher in early trade, up 1.6%.

The S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $6.81. Shares are currently changing hands for $6.92.

This comes following the release of Santos' full-year 2022 financial results.

Here are the highlights.

(*Note all figures are in US dollars.)

Santos share price gains amid surging profits

  • Record production of 103.2 million barrels of oil equivalent (mmboe), up 12% from 2021
  • Record revenue from ordinary activities of $7.8 billion, up 65% year on year
  • Net profit increased 221% from 2021 to $2.1 billion
  • Earnings before interest, taxes, depreciation, amortisation, and exploration expense (EBITDAX) of $5.6 billion, up 101% from 2021
  • Final unfranked dividend of 15.1 US cents per share, up 78%

What else happened during the year?

Other metrics of interest that could be lifting the Santos share price today include the 160% year on year increase in underlying profit, which came in at $2.5 billion.

(Santos notes that this measure excludes the impacts of asset acquisitions, disposals and impairments, as well as items that are subject to significant variability from one period to the next, including the effects of commodity hedging.)

Santos also reported ending the year with a record reserve and resource position of 5 billion boe, with 165 mmboe 2P reserves added in Alaska following the sanction of Pikka Phase 1.

2022 also saw Santos successfully implement its merger with Oil Search, which it said included the realisation of $122 million of annual synergies.

The Barossa gas project faced some delays but is now 55% complete.

And with free cash flow from operations leaping 142% year on year to $3.6 billion, Santos strengthened its balance sheet with $5.6 billion of liquidity at 31 December. Net debt came down by $1.7 billion to end the year at $3.5 billion.

What did management say?

Commenting on the results that look to be boosting the Santos share price today, CEO Kevin Gallagher said:

We have commenced 2023 with a high level of confidence that Santos will execute its strategic plan and deliver sustainable returns to shareholders as a result. Demand for our products is likely to continue to be strong in 2023 and beyond.

What's next?

Looking ahead to what could impact the Santos share price over the coming months, the company offered 2023 production guidance of 89 to 96 mmboe with sales volumes of 90 to 100 mmboe.

Capital expenditure for major projects, including Santos Energy Solutions is forecast to come in at around $1.8 billion. And upstream production costs for 2023 are expected to fall in the range of $7.25 to $7.75/boe.

Santos share price snapshot

As you can see in the chart below, the Santos share price – which doesn't include the dividend payouts – is down just over 2% since this time last year. Longer-term, shares are up 35% over five years.

Motley Fool contributor Bernd Struben 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 Scott Phillips.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »