Santos (ASX:STO) cops hefty loss amid sullen global energy demand

• The knock-on effects of sullen global energy demands were reflected across most performance metrics in Santos’ (STO) half-yearly round-up
• The oil and gas producer reported a US$357 million (approximately A$460 million) loss for the period ended December 31, as underlying profits slumped 60 per cent
• Santos Managing Director Kevin Gallagher described 2020 as a “ride to the bottom of the cycle” for the ASX 200 company, as the pandemic drove down demand and pricing in oil and LNG markets
• In some positive developments, Santos achieved record oil production and maintained its fully franked final dividend payment
• Investors appear unperturbed by the results, as Santos shares closed the session up a slight 0.28 per cent at $7.06 each

The knock-on effects of sullen global energy demands were reflected across most performance metrics in Santos’ (STO) half-yearly round-up.

The oil and gas producer reported a US$357 million (approximately A$460 million) loss for the period ended December 31 in comparison to a US$674 million profit (about A$869 million) in 2019.

Key metrics across the board painted a similar picture, as underlying profits slumped 60 per cent to US$287 million (roughly A$370 million) on the previous period and earnings before interest, taxes, depreciation, amortization and exploration expense fell 23 per cent.

Santos Managing Director Kevin Gallagher described 2020 as a “ride to the bottom of the cycle” for the ASX 200 company, racked by lower oil and LNG prices stemming from COVID-19’s impact on global energy demand.

In some positive developments over the half year, Santos generated record production in volumes of million barrels of oil equivalent, climbing 18 per cent on 2019 figures.

Santos managed to hold free cash flow at US$740 million (about $954 million) — albeit a 35 per cent decline on the previous period — and received A$4 million in JobKeeper payments up to September 2020.

Shareholders were granted some respite by way of a US$0.05 (approximately A$0.64) fully franked final dividend, which remains unchanged from the previous payment.

“These results again demonstrate the resilience of our cash-generative base business in a lower oil price environment and strong operational performance across our diversified asset portfolio,” Santos Managing Director Kevin Gallagher affirmed.

“Our strongly cash-generative base business and diversified portfolio means that we are well positioned to drive free cash flow as commodity prices recover,” he concluded.

Investors appear unperturbed by the results, as Santos shares closed the session up a slight 0.28 per cent at $7.06 each.