Australian Energy Giants Woodside and Santos Forecast Earnings Decline Amid Execution Risks
Key Points:
* Modest earnings drop: Woodside and Santos anticipate a decline in annual profits due to lower energy prices and ongoing execution risks.
* Lower revenue growth: Flat energy prices and volumes result in stagnant revenue for both companies in USD terms.
* Woodside's projections: Underlying net profit estimated at $2.96 billion for fiscal 2024, down from $3.32 billion last year; higher restoration and operational expenses.
* Sangomar concerns: Production plateau for Sangomar project in Senegal extended to Q2 2025, impacting cash flow and payout ratio sustainability.
* Louisiana LNG stake sale: Woodside assessing potential impact of tariffs on divestment of stake in Louisiana project.
* Santos' Pikka Phase 1: Focus on construction progress and potential acceleration of first oil production to late 2025.
* Barossa project update: First gas expected in Q3 2023; concerns about production and capital expenditure estimates.
* Santos' capital management policy: New policy aims to increase distribution per share payments by 20%.
* Earnings announcements: Santos and Woodside scheduled to release annual earnings updates on February 19 and February 25, respectively.