Woodside share price rises despite 74% decline in FY23 profits

How did this energy giant perform in FY 2023?

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The Woodside Energy Group Ltd (ASX: WDS) share price is having a decent session.

In early trade, the energy giant's shares are up 1.5% to $30.49 following the release of its FY 2023 results.

Woodside share price rises on FY 2023 results

  • Operating revenue down 17% to US$13,994 million
  • Underlying net profit after tax down 37% to US$3,320 million
  • Statutory net profit after tax down 74% to US$1,660 million
  • Fully franked final dividend down 58% to 60 US cents per share

What happened during the half?

For the 12 months ended 31 December, Woodside reported a 17% decline in operating revenue to US$13,994 million. This reflects lower prices across all commodities, partly offset by higher sales volumes.

Woodside's average realised price was down 30% to US$68.60 per barrel equivalent and annual sales volumes were up 19% to 201.5 million barrels.

The company's profits took a hit during the year due to its lower revenue and higher production costs. Woodside's underlying net profit after tax was down 37% to US$3,320 million.

On a statutory basis, the company's net profit after tax was down by 74% to US$1,660 million. This reflects non-cash post-tax asset impairments of US$1,533 million relating to Shenzi asset.

In light of its profit decline, Woodside cut its fully franked final dividend by 58% to 60 US cents per share. This brought its FY 2023 dividend to US$1.40 per share, which is down 45% year on year.

Management commentary

Woodside's CEO, Meg O'Neill, was pleased with the 12 months. She said:

Woodside is supplying energy the world needs from a high-quality portfolio which is geographically advantaged to meet growing demand for LNG. Our focus on disciplined capital management has allowed us to deliver consistently strong returns to shareholders.

Underlying profit was strong, enabling us to maintain an 80% dividend payout ratio. While realised prices were down year-on-year to levels closer to historic norms, annual sales volume topped 200 million barrels of oil equivalent (over 548 Mboe/d), generating revenue of almost US$14 billion. Free cash flow of US$560 million was a significant achievement in a period of major capital expenditure and normalised prices.

Outlook

Woodside has held firm with its guidance for FY 2024.

It is guiding to production of 185 Mmboe to 195 Mmboe for FY 2024 with capital expenditure of US5 billion to US$5.5 billion.

The Woodside share price is down 12% over the last 12 months.

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. 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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