Woodside share price higher on record US$5.23b profit

This energy giant delivered huge profit and dividend growth in FY 2023…

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Key points

  • Woodside has released its full-year results for FY 2023
  • It was a record year for the energy giant
  • This was thanks to higher oil prices, the BHP petroleum merger, and record production

The Woodside Energy Group Ltd (ASX: WDS) share price is pushing higher on Monday.

In morning trade, the energy producer's shares are up over 2% to $35.40.

This follows the release of a record full-year results this morning.

Woodside share price higher on record result

  • Operating revenue up 142% to US$16,817 million
  • Earnings before interest, tax, depreciation and amortisation (EBITDA) up 172% to US$11,234 million
  • Underlying net profit after tax up 223% to a record of US$5,230 million
  • Full-year dividend up 87% to US$2.53 per share

What happened during FY 2022?

For the 12 months ended 31 December, Woodside reported a 142% increase in revenue to a record of US$16,817 million. This reflects high operational reliability, higher realised prices, additional volume from the BHP Group Ltd (ASX: BHP) petroleum merger, and the contribution of the Pluto-KGP Interconnector.

As for earnings, Woodside reported a 172% jump in EBITDA to US$11,234 million and a 223% increase in net profit after tax to US$5,230 million. In respect to the former, Morgans was expecting underlying EBITDA of US$10,990 million for the year, so this result has come in ahead of its estimate. That may explain why the Woodside share price is rising today.

In light of this strong profit growth, the Woodside board increased its final dividend by 37% to US$1.44 per share, which brought its full-year dividend to US$2.53 per share. This was an increase of 87% year over year and represents a total distribution of US$4,804 million.

Management commentary

Woodside's CEO, Meg O'Neill, was pleased with the company's exceptional performance in FY 2022. She said:

Woodside is now a larger, geographically diverse energy company with the financial and operational strength to grow our portfolio of high-quality assets while continuing to deliver returns to shareholders. In what was a momentous year for Woodside we achieved the goals we set ourselves ahead of the merger, implementing initiatives to deliver the targeted $400 million in synergies ahead of our original schedule.

Woodside's record output was underpinned by outstanding performance at our LNG assets, which achieved 98.5% reliability across the year. A total of 9.4 million barrels of oil equivalent was processed via the Pluto-KGP Interconnector, resulting in the supply of 13 additional Pluto LNG cargoes and delivering $1.2 billion of incremental revenue.

Our net profit after tax rose on the back of the increased production and sales delivered by the expanded portfolio and higher global prices for our products. In 2022 our realised price rose 63% year-on-year to $98.4 per barrel of oil equivalent.

Outlook

Commenting on 2023, O'Neill said:

In 2023 we are also aiming to progress Woodside's pipeline of growth opportunities, including at Trion, offshore Mexico. We are evaluating bids for major work scopes, finalising execution plans and narrowing cost estimates in support of final investment decision (FID) readiness targeted this year.

We are also preparing for FID readiness at our H2OK project in Oklahoma in 2023. H2OK would be the first major project to be sanctioned under Woodside's target to invest $5 billion in new energy products and lower-carbon services by 2030

This is expected to lead to:

  • FY 2023 production of 180MMboe to 190MMboe
  • FY 2023 capital expenditure of US$6 billion to US$6.5 billion.

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 Scott Phillips.

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